In 2021, families in the United States continued to adjust to the shifting economic environment resulting from the COVID-19 pandemic. Since 2013, the Federal Reserve Board’s Survey of Household Economics and Decisionmaking (SHED) has provided insight into the financial challenges families were facing and monitored their financial circumstances. Over the past two years, this survey has provided valuable insights into how family finances have evolved through the pandemic. During this May 24, 2022 session, experts discuss the results from the most recent report on the SHED’s findings which will be released in the days leading up to the event, and the public data file that accompanies it. This survey asked over 11,000 people how their finances fared near the end of 2021. The virtual event covers findings from the SHED on the ways families fared across a range of dimensions including how parents fared through the pandemic, employment outcomes, retirement decisions, and broader family finances.
Watch the video below.
Speakers
- Jeff Larrimore, chief, consumer and community research section, Federal Reserve Board
- Alicia Lloro, senior economist, consumer and community research section, Federal Reserve Board
- Ellen Merry, principal economist, consumer and community research section, Federal Reserve Board
- Sydney Diavua, director, community partnerships and investment, Federal Reserve Bank of St. Louis moderator
Download presentation slides
TRANSCRIPT
Sydney Diavua
Good afternoon, and welcome to Connecting Communities. Today’s webinar is Economic Well- Being of U.S. Households in 2021 Results from the Survey of Household Economics and Decision Making. On slide two, I would now like to take the time to introduce our speakers for today, Jeff Lammore, Chief Consumer and Community Research section with the Board of Governors, Alicia Lloro, Senior Economist in the Consumer and Community Research Section with the Board of Governors; Ellen Merry, Principal Economist in the Consumer and Community Research Section with the Board of Governors, and I’m Sydney Diavua, Director of Community Partnerships and Investment with the Community Development Department at the Federal Reserve Bank of St. Louis. I will serve as your moderator for our session today. Let’s move to slide three where we can take care of a few housekeeping items before we get started.
For the best webinar experience, we recommend that you use the webstream to consume this live video event through your computer speakers. If you have technical issues, you are welcome to dial in to the phone number posted on the player page, but the video will not sync perfectly with the phone audio. This session will be recorded, and the presentation will be available on our Connecting Communities website. Also, in connection with this session, you can find a variety of additional resources available at www.fedcommunities.org. We will be taking audience questions during the event, and we’d love to hear from you. To submit a question used the Ask Question button located on the webinar player page, or you can email us communitie@stls.frb.org. As we move to Slide four, I need to go over our legal notice and disclaimer since this is a Fed webinar, which is that the opinions and statements expressed in this presentation are those of the speakers and are intended only for informational purposes.
They do not reflect official positions of the Federal Reserve Bank of St. Louis or the Board of Governors of the Federal Reserve System. Finally, our mission on slide five, the mission of the Federal Reserve’s community development function is to promote economic growth and financial stability for low to moderate income individuals and communities. You can look at the map to see where your community development team is located. Our work is done through a range of activities from conducting research and identifying emerging issues, developing resources and sharing ideas and fostering collaboration and building partnerships. I would now like to turn the presentation over to Jeff Larrimore with the Board of Governors. Jeff, the floor is yours.
Jeff Larrimore
All right. Thank you very much, Sydney. Thank you, everyone, for joining us. Good afternoon. I’m really excited to be able to have the opportunity to share with you the results from this year’s Survey of Household Economics and Decision Making, which was just released yesterday. This is the ninth year that we’ve conducted the survey and in it we heard from 11,000 nationally representative respondents who were interviewed in late October and early November of 2021 about their financial lives. There are a few things I think really make this survey unique and special. First, we intentionally include both questions on self-assessments as well as objective outcomes to understand how people are viewing their own financial lives. By doing so, we can see things such as how the financial recovery has directly affected the experiences of families across the country, but also the survey is intentionally designed to have substantial flexibility to cover new and emerging topics.
This year, we included over 50 new or revised questions when compared to the 2020 survey. Some of these covered topics tied directly to the pandemic such as education progress with remote schooling, while others prepared us to monitor emerging issues such as cryptocurrencies and buy now, pay later products. I certainly encourage you to also download and read the full report since there really is a lot there. But today we’re going to focus on a few key areas that we see as particularly important. Alicia Lloro is going to start by discussing the findings for overall well-being and then because the pandemic had outsized effects for parents, she’ll also focus on them specifically and share what we see about parents as a group. Ellen Merry will then share findings on employment and on housing before I conclude with the discussion of a few of the new questions on the survey.
Turning now to slide eight, before getting into the findings, I want to provide a little bit of context on the timing of the survey since I think this is important. The survey was conducted from the end of October through mid-November of 2021. We really consider the survey to be a snapshot of how people were faring at that time. At that point, as you can see on this slide, inflation was already elevated and the unemployment rate had fallen substantially from its pandemic highs. But over these six months since the survey was fielded, inflation has continued to increase while the job market has continued to strengthen; hence, the results should be interpreted as reflecting how consumers are faring in late 2021 heading into the new year. It indicates their fairness for more recent financial events. With that as some context on the survey. I now want to turn to the next slide and hand the floor over to Alicia to talk to you about overall financial well-being. Alicia, I’ll pass the floor over to you.
Alicia Lloro
Thank you, Jeff. Turning now to slide 10, here we have three top takeaways from the overall financial well-being section. First, in 2021, the highest share reported doing okay or living comfortably since the survey began in 2013. We also saw that gaps by education level edged down, but on a less positive note, they have remained large. Despite the gains in people’s own financial well-being, their view of the national economy as a whole remained low and even dropped slightly from 2020. Next slide. Since 2013, the survey has asked people how well they are managing financially. As shown by the dark blue bar on the right, in 2021, 78% of adults said that they were either doing okay or they were living comfortably. As I just mentioned, this was the highest share with this level of financial well-being since the survey began. Next slide. People of all education levels saw increases in financial well-being; however, while the gaps by education level have edged down, they have also remained large.
Comparing the top line in dark blue, which shows the share doing at least okay, among those with a bachelor’s degree or more to the bottom line in yellow, reflecting those with less than a high school degree, we see an especially wide gap, and this gap is also quite persistent. If we look over the past five years, we see a steady and sizable increase in well-being among those with at least a bachelor’s degree. That’s, again, the dark blue line, but adults with less than a high school degree, they haven’t experienced any lasting gains in well-being. Next slide. One group that had a notable increase in financial well-being was adults with outstanding education debt. As shown by the dark blue line, the share of adults with outstanding education debt who said they were doing at least okay financially increased through the pandemic with a sharp increase over the prior year. In contrast, we saw little change in financial well-being among all other adults without outstanding education debt, and that’s shown by the top line in light blue.
Although we don’t show these results here, this increase in financial well-being among those with education debt, it occurred among all post-secondary education levels. These results taken together suggest that changes in student loan policies likely contributed to this increase in self-reported well-being among those with outstanding student loan debt. Next slide. Another indicator of how people are doing financially that the SHED has asked since 2013 is how people would pay for an unexpected $400 emergency expense. 68% of all adults in 2021 said they would have covered this expense exclusively using cash, savings or a credit card paid off at the next statement. This is what we call cash or its equivalent. This year, it was up four percentage points from 2020 and was at the highest level since the survey began in 2013. Next slide, slide 15. Other measures in the survey of people’s financial situation also showed improvement. The blue set of bars on the left shows the share of people who are able to pay their bills in full for the month of the survey.
In 2021, this rate increased to the highest level over the four year period here shown on the figure. The yellow set of bars on the right show similar improvements in the share of people who had enough emergency savings to cover their expenses for three months, and this share also increased to the highest level over the period shown here. These gains in people’s financial well-being may reflect improved economic conditions as of late last year, as well as the COVID-19 relief measures. Next slide. So far, we have shown that people’s assessment of their own financial well-being as of November 2021 was generally favorable and was also at the highest level since the survey began. On this slide, we contrast people’s favorable assessment of their own financial situation with their views on the national economy, which fell substantially after the onset of the pandemic and have remained low. Looking at the yellow line on the figure shows that only 24% of adults rated the national economy as good or excellent in 2021, down slightly from 2020 and about half the rate seen in 2019 before the pandemic.
This trend contrasts starkly with a dark blue line showing the trend in people’s assessment of their own financial well-being. Next line. I’d like to shift gears now a bit to talk about how the financial well-being of parents has evolved through the pandemic. Parents are one group that historically we haven’t really focused on in the SHED, but during the pandemic they have faced acute challenges, and these challenges were evident in the sharp drop in self-reported financial well-being among parents from 2019 to 2020. That said, over the prior year, parents saw large gains in financial well-being and this was especially the case among lower income parents. So we think there could be two possible reasons why we saw these gains and one could be the expansion of the child tax credit and the other may be the return to in-person classes for most K-12 students. This year, the survey also asks parents how they felt their kids were doing, and as the well-being of their kids is an important factor for parents as they’re making decisions about their work, their spending and their housing situations.
On another positive note, most parents said that their child was doing better than a year ago, and this was the case both academically and socially and emotionally. Next slide, slide 18. This figure really highlights the starkly different experiences of parents compared with other adults through the pandemic. Looking at the dark blue line, we see that after the onset of the pandemic, parents exhibited a sharp drop in the share doing at least okay financially. Then over the prior year, the share doing at least okay, not only rebounded, but it surpassed what it was before the pandemic. This trend among parents contrasts sharply from that of all other adults shown in the light blue. Here, we see a steady increase over the past five years, even through the pandemic. Next slide. In this figure we show that the gains in financial well-being among parents were largest among lower income parents. First, I’d like to focus on the top half of the figure, which shows the share of parents who were doing at least okay financially by income level.
Looking at the top set of bubbles shows that among parents with an income of less than $25,000, the share doing at least, okay, financially increase substantially from 2020 to 2021. Then as we look down the top half of the figure, we see that these gains gradually decrease as income rises. Next, the bottom half of the figure shows these results for all other adults. Here, we see little change from 2020 to 2021 in the share doing at least okay, and this is regardless of income level. This helps us to see that this isn’t just a story about lower income adults in general, it really is lower income parents in particular that saw these large gains in financial well-being. Next slide. Looking at other measures also showed improvements in parents financial circumstances, excuse me. The share of parents who would cover a $400 emergency expense completely using cash or its equivalent increased sharply to 64% in 2021. We haven’t seen such large gains in these shares, both the doing at least okay financially and this $400 expense question since we began measuring them for parents in the SHED.
As I mentioned earlier, we think there are a couple of possible explanations for why we are seeing these improvements. One is the expansion of the child tax credit and the other is the return to in-person schooling. I’ll first talk about the expansion of the child tax credit, which increased the amount of the credit, expanded eligibility and paid the credit monthly. Then I’ll talk a little bit about the return to in-person schooling. Next slide, slide 21. The survey asked recipients of the child tax credit how they spent the monthly payments, including how they spent the largest portion of the payments. Respondents were given several categories to choose from, and two in particular stood out. Shown by the first set of bars was saving the credit, and the second one that stood out shown by the fourth set of bars was spending on housing or utilities. Higher income recipients were most likely to save their monthly child tax credit payment. Over half of those with an income of 100,000 or more save the largest portion of the payment, that’s shown by the dark blue bar.
On the other hand, lower income recipients were most likely to spend the largest portion of the credit on housing and utilities, and that’s highlighted by the yellow and light blue bars. These patterns may provide some insight into why we saw larger gains in financial well-being among lower income parents. The fact that lower income parents were most likely to spend the CTC payments on housing and utilities may indicate that the payments help them meet their basic living expenses and helped improve their financial well-being. Alternatively, higher income parents who are most likely to save the payments may have already been doing okay financially, so we wouldn’t expect to see gains in this measure for those households or those adults. Next slide. The other possible reason why we saw an increase in financial well-being among parents is that many kids returned to in-person schooling in 2021. Shown here in the figure, 93% of parents said their youngest child enrolled in K-12 was going to school in person, which was substantially higher than the 27% seen in 2020. This return to in-person schooling may have eased child care responsibilities and allowed some parents to return to work or to work more hours. This now concludes my portion of the presentation, so at this time, I would like to turn things over to Ellen.
Ellen Merry
Thank you, Alicia. Turning to the next slide, we’ll look at some of the top takeaways for the employment section of our report. In this part we’re going to highlight some content that we added to explore the ongoing effects of the pandemic on employment, including the first bullet, noting that concerns about COVID were a common reason for not working. We also highlighted some worker perspectives that can inform our understanding of voluntary quits in the labor market. As noted in the middle bullet among those working from home, a required return to the office would have had a similar effect on retention as a pay freeze. In the third bullet, among the 15 of workers who changed their main job in the year before the survey, most said that their new job was better. Turning to the next slide, we’ll look first at the reasons for not working. Now here we look at prime age adults and the shares of this group who were not working for different reasons. Just for some context on the numbers shown here, 77% of prime age adults were working in the fall of 2021 and 23% were not working.
The shares shown here some to more than 23% because many people had more than one reason for not working. Concern about COVID exposure was a common reason for not working in the second bar at 7%. This was just below the 9% of prime age adults who gave health limitations or disabilities as a reason they weren’t working in the top bar, but also higher than the shares that gave other reasons like child care or not being able to find work. We also saw some gender differences in the reasons people gave for not working. Women were more likely than men to cite family obligations and child care as reasons they weren’t working, and they were also more likely to cite concerns about COVID as a reason. Turning to the next slide, consistent with what we’ve seen in the past, working from home was more common among workers with a bachelor’s degree at the bottom set of bars. In 2020, the yellow bar, 46% of adults with a bachelor’s degree or more who were working for someone else said that they were working from home all of the time.
An additional share said that they were working from home some of the time. In 2021, the share of this group with a bachelor’s degree or more who were working from home all the time was sizeable as well, but it increased from what we saw in 2020 to 33%. Now in the following slide, we look at the results from questions we added to provide context on worker perspectives about jobs. Looking now at slide 27, we asked people who could work from home and said they prefer to do so at least some of the time about their reasons for their preference. People could select multiple answers, and as shown in the top two bars, the most common reasons were less time commuting and work-life balance. As you can see in the lower bars, the shares giving other reasons were smaller but still substantial. Notably, over half sighted concerns about COVID-19 is a reason they would prefer to work from home. Still, this is considerably lower than the shares saying that they would like to work from home for work-life balance.
Now another line of questions that we ask to elicit worker preference focused on hypothetical scenarios, and the results for those are included in the next slide on slide 28. These responses are from adults who work for someone else and worked from home at least some of the time. Focusing on the top bar when asked how likely they would be to look for another job if their employer required them to report to the office in person, 45% said that they would be very or somewhat likely to look for another job for. For comparison, we also asked other hypothetical questions about how different changes with their pay would affect their likelihood of looking for another job. The second bar shows responses if their employer were to keep their say their pay the same for a year, that is, a pay freeze. Responses on this question were most similar to those for the requirement to return to the office in person as 42% so that they would be very or somewhat likely to look for another job.
Turning to slide 29, a third approach to understanding worker preferences focused on the perspectives of people who had changed their main job in the year prior to the survey. In 2021, 15% of workers said their main job was different than it was a year ago. As shown in the top bar, 62% of those who had changed jobs said their new job was better overall, that’s in dark blue, and another 28% said it was about the same, shown in medium blue. Now as you look down the chart, the majority of workers who changed jobs said their new job was either better or about the same on all the dimensions of the job covered by the questions. The bottom bar of the figure includes results for the current and former employer’s COVID policies. We included this part of the question because it could be a factor in the job changes for some workers. The most common response, which is given by 64% of workers, was that COVID safety and policies were about the same for their current and former employers.
So differences in COVID safety or policies do not appear to be a key driver of job changes, but the SHED survey also included some questions on non-traditional or gig employment. We’ll turn to some of those results on slide 30. To explore how gig activities may be contributing to the economy in ways we don’t pick up through traditional employment measures, we also ask about gig activities, including selling items through places like flea markets or online marketplaces, short-term property rentals and freelancer gig labor. That’s activities like ride sharing, yard work or dog walking, where people are paid for tasks but usually have flexibility about when and how they choose to work. Overall, 16% of adults had performed gig activities over the prior month. This includes 11% who sold things, 1% who offer short-term rentals and 6% doing freelance or gig labor. Some people perform more than one type of these activities. Now gig activities were rarely people’s main source of income. Only 2% of adults said that they earned more than half of their income from gigs over the prior month.
Turning to slide 31, we added a question in the 2021 SHED asking adults why they had done gig activities. As shown in yellow, 71% said that choice best describe why they were doing gig activities while the other 29% answered necessity. While the majority of people who did gig activities of any type reported the reason was choice, people who did freelance gig labor, the things like ride sharing or yard work we’re less likely to give the answer choice compared to those who would did gig sales or rented property. Turning to Slide 32, we’ll look at some of the top takeaways on housing. Here too, we asked some new questions and these were posed to renters in the 2021 SHED and focused on whether or not people had been behind on rent. As shown in the first two takeaways, 17% of renters reported they had been behind on rent in the prior year, and Black and Hispanic renters were more likely to have been behind.
The SHED also includes questions for homeowners and as shown in the third takeaway, higher income homeowners with a mortgage were more likely to have refinanced in the prior year. Turning to slide 33, on the 2021 survey, we ask renters if they had been behind on rent at any time in the past year, and we also asked them if they had been behind on rent at any time in 2019 before the pandemic. 17% of renters had been behind in 2021, higher than the 10% who reported they were behind in 2019. Looking at the figure at the bottom of this slide, renters with a family income of less than 50,000 saw the biggest increase in the share who have been behind on rent over the pandemic going from 12% in 2019 to 23% in 2021. Among renters of the family income of 50,000 or more, the share had been behind was very similar in these two years at five and 6% and was also lower than the share reported by renters with incomes under 50,000.
Turning to the next slide, in slide 34 you can see that Black renters and Hispanic renters were more likely to have been behind on rent payments compared with other renters. This disparity was present in 2019 and persisted through the pandemic. In 2021, over one in five Black renters and Hispanic renters said that they had been behind on rent in the prior year when compared to the share of renters who said they were behind on rent in 2019, White, Black and Hispanic renters also in all saw increases in the year who were behind on rent in the 12 months before the 2021 survey. Although not shown here, layoffs during the pandemic may have contributed to the difficulties paying rent. Renters who were laid off in the prior 12 months were more likely to have been behind on rent compared with renters who were not laid off.
Differences in layoffs by race and ethnicity may also have contributed to the differences we see here in being behind on rent, since layoffs were more common for Black and Hispanic renters than for other renters during 2020 and 2021. Turning to slide 35, the SHED also includes some questions for homeowners and here we look at refinancing. Many homeowners with mortgages took advantage of the continued low interest rates in 2021 to refinance and as shown in the top bar, nearly a quarter of all homeowners with a mortgage refinance their mortgage within the prior year. Higher income homeowners were more likely to have refinanced. In the very bottom bar, 29% of mortgage holders with an income of at least a 100,000 refinanced within the prior 12 months. Compared with 23% of those within income between 50 and 100,000, 99,000, and 16% of those within income under 50,000. I will pause here and turn the presentation back over to Jeff for him to talk about some of the emerging issues we covered in the 2021 survey.
Jeff Larrimore
Excellent. Thank you, Ellen. Now if you’ll turn to slide 37, thus far we’ve touched on some of the major themes in the survey to understand the current financial environment and how households are faring in 2021, but we also include some questions in the survey to cover new topics each year. So I want to spend just a few more minutes before opening the Florida questions on three of these topics. One notable new topic is cryptocurrencies, for which we consider both the frequency of their use as well as the different ways that people are actually using these products. We also ask about some other new topics in the survey including natural disasters and buy now, pay later credit products that I’ll also discuss. You’ll turn to slide 38. 12% of adults said that they had used or held any type of cryptocurrency in 2021. But what we also see is that most people who did so used or held cryptocurrencies for investment purposes rather than actually using them for transactions. So only 1% of people used cryptocurrencies to send money to friends or family and 2% used it to buy something or to make a payment.
If you’ll turn now to slide 39, we also looked at the characteristics of those who were using cryptocurrencies for transactions and for investments and noted some interesting patterns here. While recognizing that it still is a very small share of the population who are using cryptocurrencies for transaction. Those who are doing so tend to be lower income. They’re twice as likely as other adults to be unbanked and over a quarter of these transactional users don’t have a credit card, and you can contrast this with cryptocurrency investors. Cryptocurrency investors are disproportionately higher income. They nearly always have a traditional bank account and typically, they also have a credit card. These results indicate that different types of people may be getting involved with cryptocurrencies for different reasons and there do seem to be at least these different types of cryptocurrency users and frequently they have different backgrounds and different demographic and socioeconomic characteristics.
I also want to emphasize though that it really is a small share of transactional cryptocurrency users. So this means that at least right now, this doesn’t appear to be a major factor in how most people are interacting with financial products, even though we are seeing some of these differences in terms of the types of people who are using it for investments versus transactions. Turning now to slide 40, another financial product that’s emerged in recent years is buy now, pay later products, where people purchase a product and then make a series of fixed payments usually for to cover the cost in subsequent months. We found that 10% of adults said they used one of these buy now, pay later products in the past year, but we also see that there is this racial gap in the usage rates with Black and Hispanic adults being more likely to use these emerging buy now, pay later services.
On the next two slides, if you’ll turn to slide 41 is the last new topic that I want to touch on on natural disasters. Almost since the inception of the survey, the SHED has asked about medical expenses as an example of an unexpected expense that people face. This year we expanded upon the unexpected expenses or unexpected events that we consider by asking about natural disasters as well. We find that 16% of people said they experienced a disruption from a natural disaster with income disruptions and property damage being the most frequent. I want to emphasize here that the question is worded relatively broadly when describing disasters. So respondents are likely including both large-scale disasters as well as smaller scale localized issues like damage from a falling tree in a storm. As they’re thinking about answering this question, we don’t spell out the very precise details, but it’s asking about whether they experienced any disaster or severe weather event.
Jeff Larrimore
As you’re interpreting this 16%, I think it’s worth keeping that in mind. The way that the fact that this is intended is a relatively broad measurement. On slide 42, we can then look at the likelihood of reporting disruptions from disasters by income and by race ethnicity. What we find is that lower income adults as well as Black and Hispanic adults are more likely to report disruptions from natural disasters in severe weather. This is something that I think does warrant some additional exploration to think about whether this is reflecting the physical infrastructure of property that different types of property that people have, differences in the locations of where people are living or other disparities. So I recognize that this is really probably just scratching the surface of the issue and there’s likely more that can still be done with these data and with the other questions on disasters in the survey, but I at least wanted to give you a flavor for some of the things that we’ve been seeing on natural disasters so far.
This really brings me to the last point I want to make about the survey before we take your questions, if you’ll turn to slide 43. As I mentioned at the start, the full report on the findings is available on the Federal Reserve’s website, and there really is a lot more that we could include today. You can access the full report through the link that was on the first slide of this presentation deck today, and it is available on the Connecting Community’s website, but you can also access it through the data page of the Federal Reserve’s website, federalreserve.gov or by searching for Federal Reserve SHED in your preferred search engine. It should be the top or one of the very top search terms that you then find. In addition to the report, if you’re thinking about wanting to go and explore deeper into any of the topics that we talked about today or other aspects of the report, there’s also public data available with all of the individual level responses that can be used for other analyses.
Jeff Larrimore
So I definitely encourage you to download the data, use it for your own research as well, including potentially exploring other dimensions of the topics that we’ve been discussing. These data also even allow you to link some people’s responses over time to be able to track how people were faring from one year to the next so you can see for a subset of respondents, what their responses were in the 2021 survey compared to say the 2020 survey. There really is a lot there in the data to work with, and I think it’s just a very rich resource that I think has a lot of potential and encourage you to go and explore that as well. With that, I want to thank you again for your time today and listening to us and share these results about the SHED. I’ll go ahead and pass it back to Sydney to open the floor for questions.
Sydney Diavua
Thank you, Jeff. I invite all of our speakers to rejoin us for a question and answer, and you can turn your cameras on. As a reminder, we are taking questions from our participants today. Please submit them using the Ask a Question button on the bottom left hand of your screen. You can also email us at communities@stls.frb.org. Our first question today goes to Ellen. “Ellen, with women taking the brunt of the pandemic as far as having to stay home with children, where are they now? Do they still have jobs?”
Ellen Merry
Thanks, that’s a really excellent question. I mentioned some of the gender differences we saw and reasons for not working, but yes, women are working. I don’t think we gave a gender breakout on the sheer working in the report, but we did note that and while women were more likely to say that they were not working because of child care or family care responsibilities, the share of women who said they weren’t working because of child care was really similar to what we saw before the pandemic. So that’s encouraging that there’s … and as I think as Alicia mentioned in some of her remarks, the impact on parents I think has been lessened from having kids back in school as well.
Sydney Diavua
This next question goes to the full group. “Please describe any gender differences that you noticed in your research specifically broken up by age and ethnicity if possible.”
Ellen Merry
One of the ones that, I don’t know that we have both gender and age. Jeff or Alicia may remember a place where we have … or ethnicity. But another one that I’ll mention where we highlight in the report is in the retirement chapter, retirement investing. We look at gender differences in financial literacy and in comfort and confidence in investing, so that’s one of the places that comes to my mind. Jeff, did you have any that came to your mind?
Jeff Larrimore
Yeah, I think that the two main places that immediately come to mind are actually, it’s the two that you were just talking about, so one of them being the retirement savings. The other being, we certainly talk about this with respect to employment and the reasons that people aren’t working, and in particular, things you pointed out with the importance of child care there. For a lot of these, because we’re asking about the full family in the survey for married couples, a lot of the questions it’s really people are answering about them and their spouse, which does limit some of the gender comparisons, which is why I think there’s a little bit less on gender comparisons in a lot of the results than there are for some of the other breakdown such as age, race, ethnicity, income status, et cetera.
Sydney Diavua
Jeff, with the $400 emergency expense question, it’s hard to compare across time. Given that $400 today, it’s different than $400 back in 2013. Has there been thought given to revising the $400 number?
Jeff Larrimore
Yeah, so I’ll start with the fact that the intention of this question always really was intended to be a pretty modest emergency expense. In that sense, the fact that it is in some sense even more modest is, it can be enlightening about how households are faring. We haven’t considered revising the question for inflation. I don’t know whether we would consider doing so in the future. This is certainly obviously something that we have been have thoughts on about, though. Just for context on what $400 back in 2013, I think that it’s about 470 would be the equivalent amount that it would be today, so that’s the context we’re thinking of. Actually, were a couple years ago, we did actually have a question in the survey where we asked people who said that they would struggle with a 400 emergency expense what the largest amount that they would be able to pay with cash is, and a number of quite frequent that people are saying actually under $100 in that group.
Jeff Larrimore
I think that would be another place to turn. Just looking back, I don’t remember the exact year or portion off the top of my head. I think it was around 2016 or so, to get some context on some different dollar values in there. It’s one of these things where we may consider adjusting at some point in the future, but we really wanted this to be a relatively small modest emergency and it still is. In terms of how much is the inflation actually affecting results, I actually would also point to some of the findings that Alicia presented for the overall financial well-being that we see a similar rise in overall financial well-being over this period as we saw for the $400 question. I really would attribute the improvement over time much more to improving household finances than to the $400 question, just being a smaller dollar amount now.
Sydney Diavua
Thanks, Jeff. This next question is for Ellen. “Do you have any data on how households supplemented their income, for example, through self-employment or micro businesses?
Ellen Merry
Let me highlight a few other things we have that relate to gig employment, and then Jeff may have anything that he could … I don’t know, he may have some things to add about self-employment. As I mentioned earlier, and we do have the questions about whether or not people had done gig activities and also trying to get a sense of how important that was for them financially, I mentioned the statistic that there were rarely people’s main source of income, only 2% of adults said that they had earned more than half their income from gigs in the prior month.
Ellen Merry
But we have some other questions too that people performing gig activities often had another job, and over half of them said that they had a job working for someone else. We asked about how much time they spent among those who spent at least 20 hours on gigs, 46% reported that they had a job working for somebody else. So there’s evidence there that for a lot of people this is supplementary. So we have those kinds of questions. I mentioned the choice and necessity questions. Jeff, was there anything that nuanced there about self-employment versus gig or anything else in that category that you would want to throw in?
Jeff Larrimore
Yeah, so I think that the one other thing that I would add there is in addition to the specific gig employment questions, we do ask people who are working and have what I’ll call a main traditional job and they answer yes to the traditional employment questions, what a type of job it is and whether they’re working for someone else and if they’re self-employed or if they have some other work arrangement. Of people who are working who are working, 86% say they’re working for someone else, 12% say they’re self-employed, and 2% say they have some sort of other work arrangement. We have not delved deeply into this question. I think it’s another case where I would point to the fact that the public data is available, so there might be some more analysis that could be done with that specifically, but that’s the one other piece I would point to.
Sydney Diavua
So our next question, “I know the definition of children often looks at children under the age of 18. Do you have any data by age cohorts, for instance< on parents with children zero to five?” Jeff, I think maybe this question goes to you first.
Jeff Larrimore
Sure. That’s actually a new thing that we added this year, so actually, I’m really glad that somebody asked this question. In past years, we didn’t have detailed information about the age of children. This year, given how important we recognize that parents and children, this was a new addition that we had. So we actually now do ask parents about the age of all of their children that they’re living with. We can break this down by the various age cohorts and this idea of thinking of children ages zero to five, a lot of what we do think about the school-aged children in terms of the what type of school they went to, what parents’ views are of their educational background.
Jeff Larrimore
I’m not aware of anything in the report off the top of my head that specifically does those child breakdowns, what the data is there, and it is a new resource that we have. I think one of the reasons why I don’t have a whole lot to point to in terms of things we’ve done with it is because it’s new this year, there’s less availability to be able to do a time series and follow parents by age of children over time.
Sydney Diavua
I know we were having a few technical difficulties, but I think Alicia has rejoined us. Alicia, this next question’s to you. “I am interested in how the availability and cost of child care influenced people’s financial decisions including returning to work.”
Alicia Lloro
Hi, thanks. That’s a really good question. In the current SHED survey, we don’t ask about cost of child care, and mainly we focus in our results on the return to in-person schooling for K-12, so I can’t speak to a lot of that on the current survey. We did find in the 2020 survey last year that many parents said that they had worked less or were not working because of disruptions to child care and K-12 schooling. But I can’t really say too much about the returning to work or the cost of child care based on the 2021 survey. I would just point you to what Ellen had said earlier and the results she presented with gender differences and reasons for not working as far as child. But yeah, we can’t directly speak to cost.
Sydney Diavua
Ellen, this next question, “I am surprised that high housing costs did not have a greater impact on people’s perceptions of economic well-being, particularly among renter populations. Can you explain this?”
Ellen Merry
Well, we unfortunately can’t disentangle the overall well-being measures that we headline encompass a whole lot of different factors, so probably both the positives, I’d say the stronger labor market as well as some of the negatives, like the increases in prices for different things. A couple of comments about that is that each year we do have … so we can’t really disentangle what’s driving those aggregate increases. I think that’s one point. But we do have a fair amount of richness in what we cover in addition to the questions about being behind on rent and whether in the past year and then back in 2019 that I covered, we have other parts of the survey where we talk about being able to pay bills in full this month.
I would also say that there was, in addition to the part that I covered about the share who were behind on rent in the past year of renters, that was a 17% statistic. We asked them if they still owed back debt rental debt and 8% of renters said that they did still owe some back rent. Some of them apparently had been able to come out of that hole, so that that’s encouraging. So I think it’s just hard to disentangle what’s driving those aggregate well-being measures.
Sydney Diavua
Another question for you, Ellen. “Did you notice any differences in experiences of people that are over 65, and so you might consider those who are within the Medicare population versus those that are under 65?”
Ellen Merry
We have one cut that I can recall in the report that’s specifically on that age threshold and that’s on sources of income where we break it out for all retirees I think and then the 65 or older. But we did some cuts by retirement status, and I’d say on that front, retirees overall are … Now this isn’t an age cut but are doing better, and that’s not a new thing this year, but 81% of those who were retired said that they were doing at least okay financially compared to that headline 78% for the population overall. So we didn’t do a lot of specific cuts by that age threshold.
Sydney Diavua
I’ll put this question to the group. “What explains the disparity between how respondents viewed their financial fortunes versus how they viewed their local and national economy?” Alicia, I’ll start with you.
Alicia Lloro
Hi, thanks. Yeah, that was a really striking finding that we have in this year’s report. I think that it’s hard for us to know for sure, and we can’t really say based on the data. One thing that does come to mind is that people, they have a lot of information about their own finances. They clearly have firsthand information about how they’re doing, but the way they get their information about the national economy and a little bit less the local economy is much different. So it’s possible that could be driving some of the difference, but really, it’s hard to say. Like I said, I think that was a real striking finding. I’m not sure if Jeff or Ellen have other thoughts.
Jeff Larrimore
I think Alicia is spot on with that one. I think that it’s one of these things where we know that it’s the way that people form their opinions of their national economy may be somewhat different than the way they inform you about their own opinion of their own circumstances. We have the one question about their perceptions of the national economy and as we know, we know we actually can do a lot more to say what’s feeding into their own financial picture. We actually are able to say a lot less about what’s feeding their perceptions of the national economy.
Sydney Diavua
Next question. It’s also for you Jeff, “Have you evaluated the data based on age?”
Jeff Larrimore
Yeah, so we have a number of age cuts that are in the report. A couple of them that come to mind, so some of them are things that you probably would already expect. We see for example that young adults are less likely to be homeowners for example. We also have cuts based on … or do age cuts for some of the banking activities for example. So young adults are more likely to have overdrafted an account. There are a number of places through the report that age factors in. We certainly also think about that in the education student loan section in people’s perceptions of education and whether they have student loan debt, things like that. There are certainly a number of places through the report that age is factoring into the way we’re thinking about it,
Sydney Diavua
“The percentage of BNPL users you’re reporting is quite a bit lower than most reports which usually come in at 20% or higher. Any thoughts on why that is?”
Jeff Larrimore
Yeah. We actually really spent a while thinking about how to phrase the question on buy now, pay later products. One of the things that we were really concerned about when we were crafting the question is making sure that people understood what it was that we were actually asking about. So they weren’t responding thinking we were talking about credit cards in general for example. I haven’t looked at the exact way that other surveys have worded their questions recently. We certainly looked at some of them back when we were forming these questions almost a year ago now.
We also did notice this difference in the results compared to some of those other findings, I was just pulling up actually the question itself. We actually did include a specific example of what we’re talking about, so asking people, saying what they are and saying that these buy now, pay later products or offers a payment option when you’re checking out lets you make payments over time and gave them some examples of the types of firms to really try to hone in on this particular product in particular and avoid creep of other products factoring into the way people are entering. I don’t know for sure, but I think that at least could be part of why we’re getting a lower number.
Sydney Diavua
We’re getting a lot of questions about how the results can be disaggregated. Can you speak to whether the results can be split by geography or by race or by other factors?
Jeff Larrimore
Yes, so there’s a ton of ways that the data can be cut, and I’ll talk a little bit about what’s in the public data broadly because I think that’s the easiest way to think about that. In the public data, we do provide the state of residents so you’re able to see what state people live in. For the confidentiality respondents, we don’t include finer geographies in that. The one caveat that I will put there is that the survey is designed to be nationally representative, so if you’re looking at state-specific results, I would definitely pay attention to one, the size of the state, but two, looking at the demographic characteristics and making sure it matches up with what you would expect for that state from other data.
We have the race and ethnicity of respondents and the new feature that we added last year is being able to also separately identify Asian respondents. Previously we weren’t able to do that, so that’s something we were pretty excited about. Another aspect that’s new this year is being able to identify respondents who have a physical limitation, or we have a five-question sequence of functional limitations that we’re then using to identify disability. We have LGBTQ status, so that’s another thing that you’re able to identify respondents on, in addition to a whole bunch of the standard demographics you think of age, gender, marital status, parental status, et cetera.
Sydney Diavua
I want to encourage, we’ve got maybe a couple of minutes left if there are any last questions that our participants would like to put into the queue, but I want to give you some time to remind us who can we reach out to if we’d like to learn more about the data sources used and possible data collaborations, as well as where can folks download the full report?
Jeff Larrimore
The full report is available, again, on the Federal Reserve’s website. If you go to federalreserve.gov and go to the data tab at through top, there’s a option under that which is Survey of Household Economics and Decision Making. That will take you to the report, and you can download it there. If you’re wanting to reach out to ask additional questions about the data, you can email us at shed, SHED@frb.gov. That will connect you with the SHED research team I’d be happy to have any follow-up conversations about data and the specifics of the survey through that as well.
Sydney Diavua
It looks like we have time for one more question. Ellen, this one will go to you. “It looks like those who changed jobs did not experience an increase in work-life balance. Can we speculate that it wasn’t a major driver in switching jobs?”
Ellen Merry
On our end, we typically don’t like to speculate, but I don’t know if it was not a factor or sometimes what you think you’re getting isn’t what you actually get. I’m trying to pull up that slide. It’s hard to know whether or not what would be behind that because this is a retrospective question, so it would be hard to know what motivated the change.
Sydney Diavua
One more thing-
Jeff Larrimore
If I could-
Sydney Diavua
Go ahead.
Jeff Larrimore
… add briefly, I just managed to get the slide in front of me. So 40% of people did say that work life balance is better. A bunch of people are saying this the same, and I think that the other piece that I would emphasize there is we also know a lot of times when people change jobs, they may be changing for a promotion or new opportunities. For some of those people, you actually probably wouldn’t expect that they have an improvement in work-life balance if they’re actually expecting to take on new responsibility, so that could also be contributing. Although as Ellen said, we certainly can’t fully attribute an explanation to that.
Sydney Diavua
I think we are out of time for questions, but I’d like to thank Jeff, Alicia, and Ellen for sharing their time and walking us through some of the findings of the SHED Report as well as all of the participants that join today for our discussion on the Economic Well- Being of U.S. Households in 2021, Results from the Survey of Household Economics and Decision Making. As a few reminders, we will have a recording available with an audio file on the Connecting Communities website. You can find a variety of additional resources available on the Connecting Communities website. We also welcome ideas for future recordings. We just shared a survey link if you joined us in the webinar, and this same link will be distributed via email in a few minutes. We’d appreciate your feedback about today’s session. Thank you for joining us. This concludes today’s Connecting Communities webinar. Enjoy the rest of your day.
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