EconPapers    
Economics at your fingertips  
 

The Covid-19 crisis response helps the poor: the distributional and budgetary consequences of the UK lock-down

Patryk Bronka, Diego Collado and Matteo Richiardi

No EM11/20, EUROMOD Working Papers from EUROMOD at the Institute for Social and Economic Research

Abstract: We nowcast the economic effects of the Covid-19 pandemic and related lock-down measures in the UK and then analyse the distributional and budgetary effects of the estimated individual income shocks, distinguishing between the effects of automatic stabilisers and those of the emergency policy responses. Under conservative assumptions about the exit strategy and recovery phase, we predict that the rescue package will increase the cost of the crisis for the public budget by an additional £26 billion, totalling over £60 billion. However, it will allow to contain the reduction in the average household disposable income to 1 percentage point, and will reduce poverty rate by 1.1 percentage points (at a constant poverty line), with respect to the pre-Covid situation. We also show that this progressive effect is due to the increased generosity of Universal Credit, which accounts for only 20% of the cost of the rescue package.

Date: 2020-06-09
New Economics Papers: this item is included in nep-eur and nep-mac
References: Add references at CitEc
Citations: Track citations by RSS feed

Published

Downloads: (external link)
https://www.iser.essex.ac.uk/research/publications ... /euromod/em11-20.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:ese:emodwp:em11-20

Access Statistics for this paper

More papers in EUROMOD Working Papers from EUROMOD at the Institute for Social and Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Jonathan Nears ().

 
Page updated 2022-01-27
Handle: RePEc:ese:emodwp:em11-20