Financial Impacts of the COVID-19 Pandemic on Military Families

The Undersecretary of Defense for Personnel and Readiness asked IDA to examine the financial impact of the COVID-19 pandemic on Service members and their families. In general, we observe that Active duty families were more insulated from financial strain than the general U.S. population during the COVID-19 pandemic. Compared to the broader U.S. population, Active duty families were less likely to report difficulties paying for household expenses, although they were also more likely to report both an interruption to childcare and losing or leaving a job to care for children whose childcare was interrupted. Reserve members were likely affected by a substantial increase in state activations in 2020, but the net financial effect of these activations is unclear. In addition to preexisting financial protections for Service members, we identified more than 70 new DOD and Federal laws and policies that were put into place during the COVID-19 pandemic that could impact Service members financially. On the whole, the numerous laws and policies put into place appear have mitigated many potential financial impacts of the COVID-19 pandemic.