Safety Net(works): Informal Financial Support Networks and Financial Hardship During the COVID-19 Pandemic

Abstract Informal financial support networks can potentially mitigate hardships associated with income loss. This study examines patterns of informal financial support receipt during the COVID-19 pandemic and explores how such support may have mitigated hardships due to pandemic-related job or income loss. Using a national sample of U.S. adults (n = 3874) who completed a survey during the first year of the pandemic, we descriptively examine patterns in informal financial support receipt, including the predictors of receiving support, the sources of support, and what the funds were used for. We also examine the extent to which receipt of informal financial support moderates the relationship between COVID-19-related job or income loss and an array of financial hardships. 16% of our sample reported receiving some form of informal financial support because of the pandemic. Informal financial support was primarily used for food and essential expenses, and the most common source of support was parents. Those who experienced hardships and job/income loss were more likely to receive informal financial support, and receiving support did not moderate the relationship between job/income loss and most measures of hardship. Informal support may provide a buffer against some hardships but formal interventions may be necessary to more substantively protect households against hardship risks.