Stimulus Check Update: Up to $2000 Payments Did Not Make People Happy, Caused Stress [Study]

The stimulus check implemented through the American Rescue plan provides working families with a direct relief of $1,400 per person.

The White House noted in its fact sheet that a single person making less than $75,000, heads of household making less than $112,500, and married couples filing jointly that make less than $150,000 qualify for stimulus checks.

Meanwhile, people making up to $80,000 will receive partial payments. The program has become a lifeline for some Americans during the pandemic.

Some cities and towns around the U.S. made their own programs by sending small groups of people direct payments as poverty relief.

Congress approved the third stimulus check on March 11, 2021, with the Internal Revenue Service noting on March 17 that it had already distributed about 90 million payments, according to a CNBC report.

Erica York, senior economist and research manager at the Tax Foundation, said about 90 percent of taxpayers received money regardless of whether they were experiencing financial hardship.

York noted that as the payments were distributed, there was a reduction in the number of households actually spending them. In addition, a study revealed that stimulus payments made people who received them actually made people feel worse.

Stimulus Check Study

A new preliminary study posted this week on an open-access platform used to share early-stage research, SSRN, revealed what the stimulus checks can do and what they cannot. The study has yet to be peer-reviewed.

Fortune reported that researchers studied 5,243 people living in poverty in the U.S., with all participants having a baseline income of around $1,000 per month.

Participants were given a survey before receiving cash, then periodically throughout the study, measured their financial and psychological well-being, as well as their cognitive capacity and physical health.

Researchers expected that the two groups that received the one-time transfer of $500 or $2,000 would experience positive effects compared to the control group, which received $0.

However, the groups that received money "experienced greater stress in deciding how to spend money." In addition, they "were more likely to think about money, and were more aware of both their own needs and those of their friends and family."

The cash transfer amounts increased participants' spending in the short term. In the following weeks, the $500 group spent $26 more per day compared to the control group of $0. Meanwhile, the $2,000 group spent $82 more.

There was also no evidence that the cash created differences in their savings. The money that was given to the group was used on debit or credit card payments, bills, food, and drink, including shopping and transportation.

Researchers wrote that the result suggested that while the cash "did not actually produce worse outcomes," in certain situations, "it made recipients feel worse."

Stimulus Check Update

The administration of President Joe Biden requested in March this year $22.5 billion from Congress to help support the nation's pandemic response. However, Go Banking Rates reported that the request did not ask for additional direct payments to Americans.

The White House sought $18.25 billion to go to the Department of Health and Human Services, while $4.25 billion to the State Department and the United States Agency for International Development.

Some states are taking the initiative to pass their own forms of stimulus checks, such as California, Colorado, Delaware, Georgia, Hawaii, Idaho, and Indiana. Maine, Minnesota, New Jersey, and New Mexico are also forming their own version of stimulus payments.

This article is owned by Latin Post.

Written by: Mary Webber

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