Did the COVID-19 Pandemic Impact Income Mobility and Income Distribution?

Caterina Astarita and Cinzia Alcidi

Applied Economics Quarterly (formerly: Konjunkturpolitik), 2022, vol. 68, issue 3, 161-190

Abstract: The purpose of this paper is to measure employee income mobility during the first year of COVID-19 and, as a further result, to offer evidence of the progressive effect of short-term work schemes. Using the rotational sample structure of the EU Labour Force Survey (EU LFS) database, the individual income position, measured in quintiles, may be identified in two separate quarters within 2020. As a result, a variety of income mobility indices and the underlying transition matrices may be computed. Mobility indices and transition matrices give highly comprehensive information on the percentage of individuals whose economic situation improves or deteriorates. Indeed, the analysis, carried up to the quintile level, provides significant evidence of the progressivity of the cushioning measures, particularly the short-term work schemes. Six EU Member States are examined, and the research compares the first year of COVID-19 to a baseline scenario (2019). The COVID-19-induced crisis is also compared to prior financial and sovereign debt crises.

Keywords: pandemic; income distribution; income mobility; transition matrices; income mobility indices; quantile analysis (search for similar items in EconPapers)
JEL-codes: D3 D31 D6 D63 H1 H12 H2 H23 H24 I3 I32 J2 J3 J6 (search for similar items in EconPapers)
Date: 2022
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Applied Economics Quarterly (formerly: Konjunkturpolitik) is currently edited by Cinzia Alcidi, Christian Dreger and Daniel Gros

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