Economic Impact Payment, Human Mobility and the COVID-19 Mitigation in the United States

Zhang, R.

This paper studies the relationship between the individual's income and COVID-19 mitigation effort contribution. The paper suggests that in addition to the government mandatory policies, the income compensation policy is an alternative government instrument that helps increase the individual and social aggregate COVID-19 mitigation effort. I empirically test the effect of the income compensation policy by utilizing the United States economic impact payment (EIP) in April 2020 as a quasi-natural experiment, and use the cellphone GPS measured human mobility data as the outcome indicator of the COVID-19 mitigation effort. I find that by receiving EIP, individuals on average significantly increase median home dwell time by 3%-5% (about 26-45 minutes). This paper highlights an unintended effect of EIP: in addition to providing economic assistance, EIP also helps mitigate the COVID-19 virus transmission.