A new GLO Discussion Paper indicates that the negative COVID-19 labour market effects are felt the most by people in the lowest percentiles of the financial wellbeing distribution suggesting significant increases in financial wellbeing disadvantage and inequality.
The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.
GLO Discussion Paper No. 661, 2020
COVID-19 labour market shocks and their inequality implications for financial wellbeing – Download PDF
by Botha, Ferdi & de New, John P. & de New, Sonja C. & Ribar, David C. & Salamanca, Nicolá
GLO Fellows John P. de New & David C. Ribar
Author 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 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 distribution regressions indicate a shifting of the financial wellbeing distribution leftwards brought on by those suffering any of the above-mentioned labour market shocks, indicating potential significant increases in financial wellbeing disadvantage and inequality.
More from the GLO Coronavirus Cluster
Featured image: Photo-by-Adli-Wahid-on-Unsplash
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.