Economics at your fingertips  

Implications of COVID-19 labour market shocks for inequality in financial wellbeing

Ferdi Botha, John P. New (), Sonja C. New, David Ribar () and Nicolas Salamanca ()
Additional contact information
Ferdi Botha: University of Melbourne
John P. New: University of Melbourne
Sonja C. New: ARC Centre of Excellence for Children and Families over the Life Course

Journal of Population Economics, 2021, vol. 34, issue 2, No 9, 655-689

Abstract: Abstract Australia’s economy abruptly entered into a recession due to the COVID-19 pandemic of 2020. Related labour market shocks on Australian residents have been substantial due to business closures and social distancing restrictions. Government measures are in place to reduce flow-on effects to people’s financial situations, but the extent to which Australian residents suffering these shocks experience lower levels of financial wellbeing, including associated implications for inequality, is unknown. Using novel data we collected from 2078 Australian residents during April to July 2020, we show that experiencing a labour market shock during the pandemic is associated with a 29% lower level of perceived financial wellbeing, on average. Unconditional quantile regressions indicate that lower levels of financial wellbeing are present across the entire distribution, except at the very top. Distribution analyses indicate that the labour market shocks are also associated with higher levels of inequality in financial wellbeing. Financial counselling and support targeted at people who experience labour market shocks could help them to manage financial commitments and regain financial control during periods of economic uncertainty.

Keywords: Financial wellbeing; COVID-19; Unemployment; Earnings reduction; Inequality (search for similar items in EconPapers)
JEL-codes: D14 D31 J65 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:

Ordering information: This journal article can be ordered from
http://www.springer. ... tion/journal/148/PS2

DOI: 10.1007/s00148-020-00821-2

Access Statistics for this article

Journal of Population Economics is currently edited by K.F. Zimmermann

More articles in Journal of Population Economics from Springer, European Society for Population Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2021-06-10
Handle: RePEc:spr:jopoec:v:34:y:2021:i:2:d:10.1007_s00148-020-00821-2