Novel welfare state responses in times of crises: COVID-19 Crisis vs. the Great Recession

Cathal O’Donoghue (), Denisa Sologon and Iryna Kyzyma ()
Additional contact information
Cathal O’Donoghue: National University of Ireland Galway
Iryna Kyzyma: Luxembourg Institute of Socio-Economic Research (LISER)
Authors registered in the RePEc Author Service: Cathal O'donoghue

No 573, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper looks at the social policy responses to the Great Recession and the COVID-19 crisis and assesses their impact on preserving living standards in Ireland. The former crisis was in an environment pressured to balance budgets with a greater focus on cost reduction. In contrast, during the COVID-19 crisis, there was a greater focus on mitigating the impact on household incomes largely funded by debt. Another innovation in the current crisis were the joint public and private responses through social partnership. Using the microsimulation methodology, we find a stronger social policy response during the COVID-19 crisis than during the financial crisis. However, as the impact of the COVID-19 crisis was deeper and quicker, family support was not as strong as there were more individuals out of work. The contribution of the private support based on social partnership, however, was stronger. As a result, those on lower incomes ended up with higher disposable incomes at the onset of the COVID-19 crisis, albeit with policy learning, this fell over the first wave of the pandemic. We conclude by reporting a positive impact on trust in public institutions during the COVID-19 crisis as opposed to a decline during the financial crisis.

Keywords: COVID-19 crisis; Great Recession; social policy responses; income losses; living standards; microsimulation. (search for similar items in EconPapers)
JEL-codes: D31 H12 H23 I38 J38 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2021-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.ecineq.org/milano/WP/ECINEQ2021-573.pdf First version, 2021 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2021-573

Access Statistics for this paper

More papers in Working Papers from ECINEQ, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Maria Ana Lugo ( this e-mail address is bad, please contact ).