Inequality and psychological well-being in times of COVID-19: evidence from Spain

Monica Martinez-Bravo and Carlos Sanz

No 2204, Working Papers from Banco de España

Abstract: Using two novel online surveys collected in May and November 2020, we study the consequences of the first stages of the COVID-19 pandemic on Spanish households. We document a large and negative effect on household income. By May 2020 the average individual lived in a household that had lost 16% of their pre-pandemic monthly income. Furthermore, this drop was highly unequal: while households in the richest quintile lost 6.8% of their income, those in the poorest quintile lost 27%. We also document that the pandemic deepened the gender-income gap: on average, women experienced a three-percentage-point larger income loss than men. While this is consistent with previous findings in the literature, in this paper we document that this effect is driven by women from middle-income households with kids. Finally, we provide evidence that Spanish individuals experienced moderate declines in their levels of psychological well-being. This effect is not different for individuals living in rich or poor households, but the reasons behind well-being losses do differ: richer individuals are more concerned about loss of contact with dear ones, while low-income individuals are more likely to mention loss of income and employment as a key source of emotional distress.

Keywords: inequality; COVID-19; well-being (search for similar items in EconPapers)
JEL-codes: D31 I14 J31 (search for similar items in EconPapers)
Pages: 76 pages
Date: 2022-01
New Economics Papers: this item is included in nep-eur, nep-hap, nep-lma and nep-mac
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Journal Article: Inequality and psychological well-being in times of COVID-19: evidence from Spain (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2204

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