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Stimulus checks reduced food shortages, financial hardship by over

A young child watches as local residents receive food items as Food Bank For New York City teams up with the New York Yankees to kick-off monthly food distribution for New Yorkers in need at Yankee Stadium on May 20, 2021 in New York City.

Michael Loccisano | Getty Images

WASHINGTON – The two rounds of economic stimulus checks distributed over the past six months appear to have dramatically reduced financial hardship among American households, according to a new analysis of Census Bureau data from researchers at the University of Michigan.

Between December and April, the Census’ Household Pulse Survey showed that the rate of food shortages fell by more than 40%. During that same period, financial instability dropped by 45%, and anxiety and depression fell by 20%.

According to the Pulse data, the sharpest improvements in food security and financial stability occurred in the weeks immediately after two relief bills were signed into law, and the IRS began sending Economic Impact Payments to individual bank accounts.

As part of a Covid-19 relief bill, the federal government distributed $600 to nearly every American adult starting in December of last year. A second bill, the American Rescue Plan Act was passed in March with another round of checks, this time for $1,400.

Two groups in particular experienced the greatest overall decline in hardship over the first four months of this year: Adults living with children and households making less than $25,000.

A resident sorts her free groceries as others wait in line at the food pantry of the Fourth Presbyterian Church amid the ongoing coronavirus disease (COVID-19) pandemic, in Boston, Massachusetts, U.S., April 27, 2021.

Brian Snyder | Reuters

The study’s authors, H. Luke Shaefer and Patrick Cooney of the University of Michigan’s Poverty Solutions initiative, acknowledge that the economy improved over this time, likely helping to decrease overall hardship.

But they argue that with unemployment still sitting above 6% in April, the economic recovery alone is not enough to explain the dramatic increase in food security, financial stability and mental health that coincided with the stimulus payments.

Studies like this one are part of a growing body of research that suggests the direct cash transfers may have helped to insulate American families, and the U.S. economy overall, from the worst of the pandemic.

The no-strings-attached payments have also proven extremely popular with voters, including with Republicans. A March survey found that 79% of all voters supported the $1,400 stimulus checks; 70% supported a $300 per week enhanced federal unemployment benefit; and 69% supported an expanded child tax credit.

Starting in July, the child tax credit will be distributed in the form of a monthly cash payment to families with children: $300 for each child under 6 years old, and $250 for each child 6-17 through the end of the year.

These checks alone will lift an estimated 10 million American children above the poverty…

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