Monetary compensation schemes during the COVID-19 pandemic: Implications for household incomes, liquidity constraints and consumption across the EU

Michael Christl, Silvia De Poli, Francesco Figari, Tine Hufkens, Chrysa Leventi, Andrea Papini and Alberto Tumino
Additional contact information
Francesco Figari: University of Insubria
Alberto Tumino: Joint Research Centre (JRC), European Commission

No 613, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper analyses the effect of the COVID-19 pandemic on household disposable income and household demand in the European Union (EU) during 2020, making use of theEU microsimulation model EUROMOD and nowcasting techniques. We show evidence ofheterogeneity in the impact of the COVID-19 pandemic on the labour markets in EU Member States, with some countries hit substantially harder than others. Most EU MemberStates experience a large drop in market incomes, with poorer households hit the hardest.Tax-benefit systems cushioned significantly the transmission of the shock to the disposableincome and the household demand, with monetary compensation schemes playing a majorrole. Additionally, we show that monetary compensation schemes prevent a significantshare of households from becoming liquidity constrained during the pandemic.

Keywords: COVID-19; Inequality; Microsimulation; EUROMOD; compensation schemes; liquidity constraints; consumption; income stabilizers (search for similar items in EconPapers)
JEL-codes: E24 E32 J62 J63 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2022-06
New Economics Papers: this item is included in nep-eec, nep-eur and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.ecineq.org/milano/WP/ECINEQ2022-613.pdf First version, 2022 (application/pdf)

Related works:
Journal Article: Monetary compensation schemes during the COVID-19 pandemic: implications for household incomes, liquidity constraints and consumption across the EU (2024)
Working Paper: Monetary compensation schemes during the COVID-19 pandemic: Implications for household incomes, liquidity constraints and consumption across the EU (2022)
Working Paper: Monetary compensation schemes during the COVID-19 pandemic: Implications for household incomes, liquidity constraints and consumption across the EU (2022)
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:inq:inqwps:ecineq2022-613

Access Statistics for this paper

More papers in Working Papers from ECINEQ, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Maria Ana Lugo ( this e-mail address is bad, please contact ).