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The distributional impact of the pandemic

Sinem Hacıoğlu-Hoke, Diego Känzig () and Paolo Surico ()
Authors registered in the RePEc Author Service: Sinem Hacıoğlu Hoke ()

European Economic Review, 2021, vol. 134, issue C

Abstract: The top quartile of the income distribution accounts for almost half of the pandemic-related decline in aggregate consumption, with expenditure for this group falling much more than income. In contrast, the bottom quartile of the income distribution has seen the smallest spending cuts and the largest earnings drop but their total incomes have fallen by much less because of the increase in government benefits. The decline in consumers’ spending preceded the introduction of the lockdown, whose partial lifting has triggered a stronger recovery in sectors with a lower contact rate. The largest spending contractions are concentrated in the most affluent regions. These conclusions are based on detailed high-frequency transaction data on spending, earnings and income from a large fintech company in the United Kingdom.

Keywords: Spending; Earnings; Income; Benefits; Heterogeneity; Pandemic (search for similar items in EconPapers)
JEL-codes: D12 E21 G51 H31 (search for similar items in EconPapers)
Date: 2021
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Related works:
Working Paper: The Distributional Impact of the Pandemic (2020) Downloads
Working Paper: The Distributional Impact of the Pandemic (2020) Downloads
Working Paper: The Distributional Impact of the Pandemic (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:134:y:2021:i:c:s0014292121000337

DOI: 10.1016/j.euroecorev.2021.103680

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European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

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