COVID-19 epidemic and generational welfare

Francesco Giuli, Giuseppe Ciccarone and Enrico Marchetti

No 260, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: We study the effects of COVID-19, and the ensuing lockdown and scal policies, on the welfare of different age-groups within a life-cycle macroeconomic scheme, adapted from Gertler (1999), where the pandemic is represented as a shock to the mortality rate. We obtain two main results. First, we can show that lockdown policies have a negative impact on the dynamics of economic welfare of younger agents relative to that of older agents, thus providing analytical support to the idea that the management of the COVID-19 pandemic through lockdown policies has hit mainlythe young generations. Second, we show that expansionary scal policies aimed at supporting income after the lockdown a¤ect the relative welfare index of age-groups mainly through the repayment scheme of the consequent public debt; the more the repayment scheme entails a postponement of the debt repayment, the more older agents are favored (in relative terms).

Keywords: Covid19; Generational Effects; Containment Policies (search for similar items in EconPapers)
JEL-codes: E13 H51 I18 (search for similar items in EconPapers)
Pages: 38
Date: 2021-05
New Economics Papers: this item is included in nep-age, nep-isf and nep-mac
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