The FINRA Investor Education Foundation released a report, “Testing Positive: The Financial Strain of COVID-19”, which investigated the correlation between financial strain and the COVID-19 pandemic.
“The data, sourced from the FINRA Foundation’s latest National Financial Capability Study, clearly show those in COVID-19 households struggled financially far more than individuals in non-COVID-19 households,” according to the press release.
Those who were studied in the sample were from reported infections between June 2021 and Oct. 2021, the height of the covid pandemic worldwide.
During this time, the Delta variant was taking hold of the U.S., according to the Centers for Disease Control and Prevention. According to their report, “the more contagious and deadlier variant accounted for between 80 percent and 87 percent of all U.S. COVID-19 cases in the last two weeks of July 2021.”
The study examined demographics including race, gender and age to determine if there were patterns in the data. In addition, the study looked at vaccination rates, income, employment and college education to further examine the impacts of the pandemic.
According to the report, “Thirty-two percent of individuals from COVID-19 households reported being laid off or furloughed because of the pandemic in 2020 or 2021, compared to 18 percent of those in households that had not experienced COVID-19.”
The report stated that households impacted by COVID-19 reported a drop in income rates compared to those that didn’t. The report explained that the differences were significant even after controlling important demographic variables.
“When asked if they have spent more than their income in the past 12 months, 26 percent of those that experienced COVID-19 said ‘yes,’ compared to 18 percent of households without a positive COVID-19 test,” the report said.
The study explained that the pandemic created financial struggles for many households including mortgages, healthcare related debt, high cost borrowing and credit card debt.
According to the report, “32 percent of adults from households directly impacted by COVID-19 were late on their mortgage payments, compared to only 13 percent of their COVID19-free counterparts.”
The report concluded by saying that although there was a correlation between positive COVID-19 cases and financial strain, they could not assume that having the virus caused financial strain.
“It is likely that the job losses and drops in income that many more COVID-19 households faced played a significant role,” the report said. “The data strongly suggest that COVID-19 households fared far worse financially during the pandemic than non-COVID-19 households.
The FINRA Investor Education Foundation supports innovative research and educational projects that give undeserved Americans the knowledge and skills they need to make successful financial decisions.
To learn more about the FINRA Foundation and to view the report in full, visit www.FINRAFoundation.org.
