Work

The finances of Chilean households during the pandemic: an assessment from the 2021 Household Financial Survey

Year: 2025

Type: article

Abstract: The policies adopted in Chile to mitigate the impact of the Covid-19 pandemic stand out for their magnitude: they implied an increase in the liquidity of the household sector of 29 % of the 2019 GDP in an interval of 18 months. We use the 2021 Chilean Household Financial Survey to assess the impact of the pandemic and the massive liquidity shock generated by the policy response on financial decisions and the financial situation of Chilean households. We find that households used the additional liquidity to recover their consumption levels, reduce debt, and accumulate liquid assets. Once the support measures were phased out, households retained buffers, allowing them to maintain a high level of expenditure despite unfavorable macroeconomic changes. Finally, we document that the ultimate effect of the implemented policies was a deterioration in households' financial conditions, particularly for those with lower incomes.

Source: Latin American Journal of Central Banking

DOI: 10.1016/j.latcb.2025.100175

Authors: Enzo Cerletti, Magdalena Cortina, Alejandra Inzunza, Felipe Martínez, Patricio Toro

Institutions: Banco Central de Chile, Texas A&M University, Bocconi University

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: No poverty, Decent work and economic growth, Good health and well-being

Open Access status: gold

Estimated APC paid: $1,700