Research Paper IFS Working Paper Series 20/35

MPCs through COVID: spending, saving and private transfers

Authors

Publication date

20 Oct 2020

Abstract

MPCs were directly elicited from a representative sample of UK adults in July 2020. Reported MPCs are low, around 11% on average. They are higher, but still modest, for individuals in households with high current needs. These low MPCs may be a consequence of the prevailing economic uncertainty. Some respondents report that they would respond to a one-time income payment by transferring more to friends and family, others report they would see a decline in the payments received. Targeting payments to high-MPC individuals could be partly undone. Further, the aggregate MPC out of a stimulus payment need not equal the population-average MPC, even if all individuals receive the same payment.

Subjects

Households, Economics, Public Policy, Income Dynamics, Savings And Assets, Household Economics, Health, Finance, Economic Policy, and Covid 19

Links

https://www.ifs.org.uk/publications/15128

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