Welfare Resilience at the Onset of the COVID‐19 Pandemic in a Selection of European Countries: Impact on Public Finance and Household Incomes. (1st July 2021)

• Record Type: Journal Article
• Authors: Cantó, Olga; Figari, Francesco; Fiorio, Carlo V.; Kuypers, Sarah; Marchal, Sarah; Romaguera‐de‐la‐Cruz, Marina; Tasseva, Iva V.; Verbist, Gerlinde
• Is Part Of: Review of income and wealth. Series 68:Number 2(2022)
• Page Start: 293
• Page End: 322
• Publication Date: 2021-07-01
• Subjects: COVID‐19 -- household incomes -- tax‐benefit microsimulation -- income protection -- cross‐country comparison; National income -- Accounting -- Periodicals; 332.05
• DOI: 10.1111/roiw.12530
• Languages: English
• ISSNs: 0034-6586

Abstract

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.