That’s how little of their $600 stimulus check higher-income households making $78,000 or more are actually spending, a team of Harvard University researchers estimates.
Lower-income households are projected to spend a larger share of the stimulus money, with those making less than $46,000 spending $126, according to the report by Opportunity Insights.
President Joe Biden is pushing for another round of stimulus checks, this time worth up to $1,400 each, in an effort to help hard-hit households cover expenses and encourage spending to stimulate the economy as part of an economic relief bill. However, according to the Harvard researchers, the bill would get little bang for its buck in terms of economic activity with $200 billion in direct payments only leading to $15 billion in spending. The researchers noted that people in higher-income households have mostly returned to work since the peak of pandemic unemployment in April.
“This is simultaneously: A compelling argument for having some sort of checks in the recovery plan as a belt-and-suspenders approach to make sure no one is falling through the cracks of relief. And a good argument for better targeting the next round of checks,” Jason Furman, a professor of economics at Harvard, and former top economic advisor to President Barack Obama, wrote in a Twitter post. He cautioned that the results of the study only cover one month, and that whether someone spends or saves money doesn’t fully indicate how much they need.