Micro-Evidence on the Consumption Impact of Income-Support Policies During COVID-19

Metodij Hadzi-Vaskov, Emiliano Luttini and Luca Antonio Ricci

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: Income-support policies can boost consumption during a catastrophic episode like the COVID-19 pandemic. Using data on Chilean municipalities, we investigate the impact on private consumption of income-support policies, such as lump-sum trans-fers and withdrawals of funds from the contributors’ mandatory pension accounts. We find that both emergency income and pension withdrawals had statistically sig-nificant effects with an estimated average marginal propensity to consume of about 20 percent. Consumption of durable goods is more sensitive to these policies than other goods, especially in the programs’ initial stages. Higher educational attainment and financial leverage, proxying better access to bank credit, are associated with weaker consumption reaction across municipalities.

Date: 2025-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bcentral.cl/documents/33528/133326/Doc ... 4ffd?t=1743002874490 (application/pdf)

Related works:
Working Paper: Micro-Evidence on the Consumption Impact of Income-Support Policies During COVID-19 (2025)
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:chb:bcchwp:1036

Access Statistics for this paper

More papers in Working Papers Central Bank of Chile from Central Bank of Chile Contact information at EDIRC.
Bibliographic data for series maintained by Alvaro Castillo ().