Income changes and consumption: Evidence from the 2013 federal government shutdown

SR Baker, C Yannelis - Review of Economic Dynamics, 2017 - Elsevier
We use the 2013 federal government shutdown and a rich data set from an online personal
finance website to study the effects of changes in income on changes in consumption for
thousands of affected workers. The 2013 shutdown represented a significant and
unanticipated income shock for federal government workers, with no direct effect on
permanent income. We exploit both the differences between unaffected state government
employees and affected federal employees as well as between federal employees required …