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Did the COVID-19 Pandemic Impact Income Mobility and Income Distribution?

Author

Listed:
  • Caterina Astarita
  • Cinzia Alcidi

Abstract

The purpose of this paper is to measure employee income mobility during the first year of COVID-19 and, as a further result, to offer evidence of the progressive effect of short-term work schemes. Using the rotational sample structure of the EU Labour Force Survey (EU LFS) database, the individual income position, measured in quintiles, may be identified in two separate quarters within 2020. As a result, a variety of income mobility indices and the underlying transition matrices may be computed. Mobility indices and transition matrices give highly comprehensive information on the percentage of individuals whose economic situation improves or deteriorates. Indeed, the analysis, carried up to the quintile level, provides significant evidence of the progressivity of the cushioning measures, particularly the short-term work schemes. Six EU Member States are examined, and the research compares the first year of COVID-19 to a baseline scenario (2019). The COVID-19-induced crisis is also compared to prior financial and sovereign debt crises.

Suggested Citation

  • Caterina Astarita & Cinzia Alcidi, 2022. "Did the COVID-19 Pandemic Impact Income Mobility and Income Distribution?," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot GmbH, Berlin, vol. 68(3), pages 161-190.
    • Handle: RePEc:dah:aeqaeq:v68_y2022_i3_q3_p161-190
    DOI: 10.3790/aeq.68.3.161
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    More about this item

    Keywords

    pandemic; income distribution; income mobility; transition matrices; income mobility indices; quantile analysis;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D6 - Microeconomics - - Welfare Economics
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H1 - Public Economics - - Structure and Scope of Government
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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