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Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes

Olga Cantó (), Francesco Figari, Carlo Fiorio (), Sarah Kuypers, Sarah Marchal, Marina Romaguera-de-la-Cruz, Iva Tasseva and Gerlinde Verbist

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper assesses the impact on household incomes of the COVID-19 pandemic and governments’ policy responses in April 2020 in four large and severely hit EU countries: Belgium, Italy, Spain and the UK. We provide comparative evidence on the level of relative and absolute welfare resilience at the onset of the pandemic, by creating counterfactual scenarios using the European tax-benefit model EUROMOD combined with COVID-19-related household surveys and timely labor market data. We find that income poverty increased in all countries due to the pandemic while inequality remained broadly the same. Differences in the impact of policies across countries arose from four main sources: the asymmetric dimension of the shock by country, the different protection offered by each tax-benefit system, the diverse design of discretionary measures and differences in the household level circumstances and living arrangements of individuals at risk of income loss in each country.

Keywords: Covid-19; cross-country comparison; household incomes; income protection; tax-benefit microsimulation; coronavirus; Open Access Funding provided by Universita degli Studi di Milano within the CRUI-CARE Agreement. (search for similar items in EconPapers)
JEL-codes: D31 H55 I32 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2022-06-01
New Economics Papers: this item is included in nep-cmp, nep-eur, nep-isf and nep-ltv
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Published in Review of Income and Wealth, 1, June, 2022, 68(2), pp. 293 - 322. ISSN: 0034-6586

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http://eprints.lse.ac.uk/111146/ Open access version. (application/pdf)

Related works:
Journal Article: Welfare Resilience at the Onset of COVID‐19 Pandemic in a Selection of European Countries: Impact on Public Finance and Household Incomes (2022) Downloads
Working Paper: Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes (2021) Downloads
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