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Do COVID-19 Stimulus Payments Stimulate the Economy? Evidence from Card Transaction Data in South Korea

March 17, 2022

Kuala Lumpur Research Seminar Series

  • We analyze the spending impact of South Korea’s COVID-19 stimulus payments, worth up to KRW 1 million (US$887 or €755) per household, using data on card transactions in Seoul. To catalyze the recovery of sales losses during the COVID-19 outbreak for small businesses, the Korean government restricted the use of stimulus payments to be spent in the province of residence, at establishments in pre-specified sectors. We exploit these unique policy rules to study the spending response to the stimulus payments. We find that the stimulus payments discontinuously increased Seoul residents’ offline card spending by 21.6% one week after the disbursement, and the positive impact dissipated over the following six weeks in allowed sectors and areas. The implied marginal propensity to consume out of the stimulus payments was 24%. The estimated spending responses to the stimulus payments were weaker in areas with higher average income and more cumulative COVID-19 cases. We also find that the stimulus payments flowed more to the sectors and areas that suffered less during the pandemic.

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  • Seonghoon Kim is an associate professor of economics and the deputy director of the Centre for Research on Successful Aging at Singapore Management University, and a research fellow at IZA.  He received his Ph.D. degree in economics from the Ohio State University in 2013. His research area includes health economics, labor economics, and development economics. His recent research investigates the multi-dimensional impact of COVID-19 and impact evaluation of healthcare and social insurance policy using experimental, survey, and administrative data.


  • WHEN (KUALA LUMPUR TIME): Thursday, March 17, 2022: 9:00 -10:00am
  • WHEN (ET/WASHINGTON, D.C. TIME): Wednesday, March 16, 2022: 9:00 – 10:00pm