Unemployment Shocks and Material Deprivation in the European Union: A Synthetic Control Approach

Luis Ayala, Javier Martín-Román () and Carolina Navarro ()
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Javier Martín-Román: UNED
Carolina Navarro: UNED
Authors registered in the RePEc Author Service: Javier Martín-Román ()

No 603, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper analyzes how material deprivation responds to drastic changes in unemployment levels. We explore unemployment shocks registered in some European Union countries during the so-called Great Recession. To do so, we apply the synthetic control methodology, which has been rarely used in the field of distributive analyses. We use this approach to identify the impact of unemployment shocks on material deprivation and conduct different sensitivity analyses to test the results. We find that contrary to the traditional assumption of the low sensitivity of material deprivation measures to changes in the economic cycle, unemployment shocks have a significant and rapid impact on material deprivation. This conclusion holds even when extending the period of analysis, changing the indicator of material deprivation, or modifying the definition of unemployment shock.

Keywords: material deprivation; unemployment shocks; synthetic control method; EUSILC (search for similar items in EconPapers)
JEL-codes: I32 J64 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2022-02
New Economics Papers: this item is included in nep-lab
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http://www.ecineq.org/milano/WP/ECINEQ2022-603.pdf First version, 2022 (application/pdf)

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Journal Article: Unemployment shocks and material deprivation in the European Union: A synthetic control approach (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2022-603

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