IDEAS home Printed from https://ideas.repec.org/p/ese/cempwp/cempa5-21.html
   My bibliography  Save this paper

Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes

Author

Listed:
  • Valentinova Tasseva, Iva
  • Cantó-Sánchez, Olga
  • Figari, Francesco
  • Fiorio, Carlo
  • Kuypers, Sarah
  • Marchal, Sarah
  • Romaguera de la Cruz, Marina
  • Verbist, Gerlinde

Abstract

This paper assesses the impact on household incomes of the COVID-19 pandemic and governments’ policy responses in April 2020 in four large and severely hit European countries: Belgium, Italy, Spain and the UK. We provide comparative evidence on the level of relative and absolute welfare resilience at the onset of the pandemic, by creating counterfactual scenarios using the European-wide tax-benefit model EUROMOD combined with COVID-related household surveys and timely labour market data. We find that income poverty increases in allcountries due to the pandemic while inequality remains broadly the same. Differences in the impact of policies across countries arise from four main sources: the asymmetric dimension of the shock by country, the different protection offered by each tax-benefit system, the diverse design of discretionary measures and the differences in the household level circumstances and living arrangements of individuals at risk of income loss in each country.

Suggested Citation

  • Valentinova Tasseva, Iva & Cantó-Sánchez, Olga & Figari, Francesco & Fiorio, Carlo & Kuypers, Sarah & Marchal, Sarah & Romaguera de la Cruz, Marina & Verbist, Gerlinde, 2021. "Welfare resilience at the onset of the COVID-19 pandemic in a selection of European countries: impact on public finance and household incomes," Centre for Microsimulation and Policy Analysis Working Paper Series CEMPA5/21, Centre for Microsimulation and Policy Analysis at the Institute for Social and Economic Research.
    • Handle: RePEc:ese:cempwp:cempa5-21
    as

    Download full text from publisher

    File URL: https://www.iser.essex.ac.uk/wp-content/uploads/files/working-papers/cempa/cempa5-21.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Automatic stabilizers and economic crisis: US vs. Europe," Journal of Public Economics, Elsevier, vol. 96(3), pages 279-294.
    2. Brodeur, Abel & Clark, Andrew E. & Fleche, Sarah & Powdthavee, Nattavudh, 2021. "COVID-19, lockdowns and well-being: Evidence from Google Trends," Journal of Public Economics, Elsevier, vol. 193(C).
    3. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2020. "Inequality in the impact of the coronavirus shock: Evidence from real time surveys," Journal of Public Economics, Elsevier, vol. 189(C).
    4. Mike Brewer & Laura Gardiner, 2020. "The initial impact of COVID-19 and policy responses on household incomes," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 187-199.
    5. Titan Alon & Matthias Doepke & Jane Olmstead-Rumsey & Michèle Tertilt, 2020. "The Impact of COVID-19 on Gender Equality," CRC TR 224 Discussion Paper Series crctr224_2020_163, University of Bonn and University of Mannheim, Germany.
    6. Vanda Almeida & Salvador Barrios & Michael Christl & Silvia Poli & Alberto Tumino & Wouter Wielen, 2021. "The impact of COVID-19 on households´ income in the EU," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 413-431, September.
    7. Belot, Michèle & Choi, Syngjoo & Tripodi, Egon & van den Broek-Altenburg, Eline & Jamison, Julian C. & Papageorge, Nicholas W., 2020. "Unequal Consequences of COVID-19 across Age and Income: Representative Evidence from Six Countries," IZA Discussion Papers 13366, Institute of Labor Economics (IZA).
    8. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Christl & Silvia Poli & Tine Hufkens & Andreas Peichl & Mattia Ricci, 2023. "The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(4), pages 1107-1136, August.
    2. Denisa M. Sologon & Cathal O’Donoghue & Iryna Kyzyma & Jinjing Li & Jules Linden & Raymond Wagener, 2022. "The COVID-19 resilience of a continental welfare regime - nowcasting the distributional impact of the crisis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 777-809, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olga Cantó & Francesco Figari & Carlo V. Fiorio & Sarah Kuypers & Sarah Marchal & Marina Romaguera‐de‐la‐Cruz & Iva V. Tasseva & Gerlinde Verbist, 2022. "Welfare Resilience at the Onset of COVID‐19 Pandemic in a Selection of European Countries: Impact on Public Finance and Household Incomes," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(2), pages 293-322, June.
    2. Andrew E. Clark & Conchita D'Ambrosio & Anthony Lepinteur, 2020. "The Fall in Income Inequality during COVID-19 in Five European Countries," Working Papers 565, ECINEQ, Society for the Study of Economic Inequality.
    3. Andrew E. Clark & Conchita D’Ambrosio & Anthony Lepinteur, 2021. "The fall in income inequality during COVID-19 in four European countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 489-507, September.
    4. Michael Christl & Silvia De Poli & Dénes Kucsera & Hanno Lorenz, 2022. "COVID-19 and (gender) inequality in income: the impact of discretionary policy measures in Austria," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-17, December.
    5. Foliano, Francesca & Tonei, Valentina & Sevilla, Almudena, 2024. "Social restrictions, leisure and well-being," Labour Economics, Elsevier, vol. 87(C).
    6. Nicholas W. Papageorge & Matthew V. Zahn & Michèle Belot & Eline Broek-Altenburg & Syngjoo Choi & Julian C. Jamison & Egon Tripodi, 2021. "Socio-demographic factors associated with self-protecting behavior during the Covid-19 pandemic," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(2), pages 691-738, April.
    7. Mathias Huebener & Sevrin Waights & C. Katharina Spiess & Nico A. Siegel & Gert G. Wagner, 2021. "Parental well-being in times of Covid-19 in Germany," Review of Economics of the Household, Springer, vol. 19(1), pages 91-122, March.
    8. Stefanie Stantcheva, 2022. "Inequalities in the times of a pandemic," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 37(109), pages 5-41.
    9. Andrew E. Clark & Anthony Lepinteur, 2022. "Pandemic Policy and Life Satisfaction in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(2), pages 393-408, June.
    10. Wu, Jianxin & Zhan, Xiaoling & Xu, Hui & Ma, Chunbo, 2023. "The economic impacts of COVID-19 and city lockdown: Early evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 151-165.
    11. Ben Yahmed, Sarra & Cappellari, Lorenzo & Checchi, Daniele & Corak, Miles & Jenkins, Stephen P. & Neidhöfer, Guido & Tertilt, Michele & Tommasi, Mariano, 2020. "COVID-19 and inequality," ZEW policy briefs 5/2020, ZEW - Leibniz Centre for European Economic Research.
    12. Brzezinski, Michal, 2021. "The impact of past pandemics on economic and gender inequalities," Economics & Human Biology, Elsevier, vol. 43(C).
    13. Blázquez, Maite & Herrarte, Ainhoa & Moro-Egido, Ana I., 2024. "Has the COVID-19 pandemic widened the gender gap in paid work hours in Spain?," Journal of Demographic Economics, Cambridge University Press, vol. 90(2), pages 313-348, June.
    14. Roantree, Barra & Maître, Bertrand & McTague, Alyvia & Privalko, Ivan, 2021. "Poverty, income inequality and living standards in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT412.
    15. Denisa M. Sologon & Cathal O’Donoghue & Iryna Kyzyma & Jinjing Li & Jules Linden & Raymond Wagener, 2022. "The COVID-19 resilience of a continental welfare regime - nowcasting the distributional impact of the crisis," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 777-809, December.
    16. Caperna, Giulio & Colagrossi, Marco & Geraci, Andrea & Mazzarella, Gianluca, 2020. "Googling Unemployment During the Pandemic: Inference and Nowcast Using Search Data," JRC Working Papers in Economics and Finance 2020-04, Joint Research Centre, European Commission.
    17. Cathal O’Donoghue & Denisa M. Sologon & Iryna Kyzyma, 2021. "Novel welfare state responses in times of crises: COVID-19 Crisis vs. the Great Recession," Working Papers 573, ECINEQ, Society for the Study of Economic Inequality.
    18. Lea Immel & Florian Neumeier & Andreas Peichl, 2022. "The Unequal Consequences of the Covid‐19 Pandemic: Evidence from a Large Representative German Population Survey," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(2), pages 471-496, June.
    19. Etheridge, Ben & Spantig, Lisa, 2022. "The gender gap in mental well-being at the onset of the Covid-19 pandemic: Evidence from the UK," European Economic Review, Elsevier, vol. 145(C).
    20. Kubota, So & Onishi, Koichiro & Toyama, Yuta, 2021. "Consumption responses to COVID-19 payments: Evidence from a natural experiment and bank account data," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1-17.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ese:cempwp:cempa5-21. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jonathan Nears (email available below). General contact details of provider: https://edirc.repec.org/data/rcessuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.