Shachar Kariv’s research into consumption smoothing of government workers was recently covered by The Economist.
No employees are paid until the shutdown ends—even those who continue to slog. Therein lies one threat to the economy: reduced spending. In March the National Bureau of Economic Research (NBER) published research that used data from Mint Bills, a mobile banking app, to see how government employees reacted to the shutdown in 2013. On average, outlays fell by about 50 cents for every dollar of delayed pay. Deferred debt repayments, as well as less spending, accounted for some of that figure.