Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes

Cantó, Olga, Figari, Francesco, Fiorio, Carlo V., Kuypers, Sarah, Marchal, Sarah, Romaguera-de-la-Cruz, Marina, Tasseva, Iva V. ORCID: 0000-0003-3302-8918 and Verbist, Gerlinde (2022) Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes. Review of Income and Wealth, 68 (2). 293 - 322. ISSN 0034-6586

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Abstract

This paper assesses the impact on household incomes of the COVID-19 pandemic and governments’ policy responses in April 2020 in four large and severely hit EU countries: Belgium, Italy, Spain and the UK. We provide comparative evidence on the level of relative and absolute welfare resilience at the onset of the pandemic, by creating counterfactual scenarios using the European tax-benefit model EUROMOD combined with COVID-19-related household surveys and timely labor market data. We find that income poverty increased in all countries due to the pandemic while inequality remained broadly the same. Differences in the impact of policies across countries arose from four main sources: the asymmetric dimension of the shock by country, the different protection offered by each tax-benefit system, the diverse design of discretionary measures and differences in the household level circumstances and living arrangements of individuals at risk of income loss in each country.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14754991
Additional Information:	© 2021 The Authors
Divisions:	Social Policy
Subjects:	H Social Sciences > HJ Public Finance H Social Sciences > HC Economic History and Conditions R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine H Social Sciences > HV Social pathology. Social and public welfare. Criminology
JEL classification:	D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions I - Health, Education, and Welfare > I3 - Welfare and Poverty > I32 - Measurement and Analysis of Poverty
Date Deposited:	22 Jul 2021 10:21
Last Modified:	16 Nov 2024 04:54
URI:	http://eprints.lse.ac.uk/id/eprint/111146

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