The Impact of the COVID-19 Crisis on Income Distribution Under Different Protection Schemes: the Case of Spain

Gonzalo Gómez Bengoechea

No 102, Commitment to Equity (CEQ) Working Paper Series from Tulane University, Department of Economics

Abstract: I used household survey data to microsimulate the impact of the COVID-19 crisis on income distribution in Spain. I estimate the cost of potential lockdowns on income under three different protection scenarios: no minimum income state protection, 2020’s Ingreso Mínimo Vital (IMV) and the former Renta Mínima de Inserción (RMI). Results show that COVID crisis reduces income for the entire income distribution and, even in the context of a relatively efficient redistributive system, increases inequality and poverty at various levels. The IMV approach is the most efficient one in smoothing the impact of the COVID-19 crisis on income distribution. It may be necessary to rise taxes and to reduce other expenditure policies to maintain current protection in a context of lower public revenues.

Keywords: Fiscal Incidence; Inequality; Poverty; Social Spending; COVID; Spain (search for similar items in EconPapers)
JEL-codes: H22 I3 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Commitment to Equity, December 2020, pages 1-18

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http://repec.tulane.edu/RePEc/ceq/ceq102.pdf First version, 2020 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:tul:ceqwps:102

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