COVID-19 labour market shocks and their inequality implications for financial wellbeing

Ferdi Botha, John P. de New (), Sonja de New, David Ribar and Nicolas Salamanca
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John P. de New: Melbourne Institute: Applied Economic & Social Research, The University of Melbourne; ARC Centre of Excellence for Children and Families over the Life Course, https://findanexpert.unimelb.edu.au/profile/409420-john-p-de-new

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: Using an online survey of Australian residents, we elicit the potential impacts of COVID-19 related labour market shocks on a validated measure of financial wellbeing. Experiencing a reduction in hours and earnings, entering into unemployment or having to file for unemployment benefits during the pandemic are strongly and significantly associated with decreases in financial wellbeing of around 29% or 18 points on the financial wellbeing scale of 0-100, despite various government measures to reduce such effects. Unconditional quantile regression analyses indicate that the negative COVID-19 labour market effects are felt the most by people in the lowest percentiles of the financial wellbeing distribution. Counterfactual distributional analyses and distribution regression indicate a shifting of the financial wellbeing distribution leftwards brought on by those suffering any of the above-mentioned labour market shocks, indicating potential dramatic increases in financial wellbeing disadvantage and inequality.

Keywords: Financial wellbeing; COVID-19; unemployment; earnings reduction; inequality (search for similar items in EconPapers)
JEL-codes: D63 G51 J65 (search for similar items in EconPapers)
Pages: 43pp
Date: 2020-08
New Economics Papers: this item is included in nep-hea
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Working Paper: COVID-19 labour market shocks and their inequality implications for financial wellbeing (2020)
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