Monetary compensation schemes during the COVID-19 pandemic: Implications for household incomes, liquidity constraints and consumption across the EU. A new GLO Discussion Paper by GLO Fellow Michael Christl & colleagues.

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A new GLO Discussion Paper studies the diverse impacts of Covid-19 on the private households and labor markets of EU member states making use of the EU microsimulation model EUROMOD and nowcasting techniques.

GLO Discussion Paper No. 1082, 2022

Monetary compensation schemes during the COVID-19 pandemic: Implications for household incomes, liquidity constraints and consumption across the EU – Download PDF
by Christl, Michael & De Poli, Silvia & Figari, Francesco & Hufkens, Tine & Leventi, Chrysa & Papini, Andrea & Tumino, Alberto

GLO Fellow Michael Christl

Michael Christl

Author Abstract: This paper analyses the effect of the COVID-19 pandemic on household disposable income and household demand in the European Union (EU), making use of the EU microsimulation model EUROMOD and nowcasting techniques. We show evidence of heterogeneity 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 Member States experience a large drop in market incomes in 2020, with poorer households hit the hardest. Tax-benefit systems cushioned significantly the transmission of the shock to the disposable income and the household demand, with monetary compensation schemes playing a major role. Additionally, we show that monetary compensation schemes prevent a significant share of households from becoming liquidity constrained during the pandemic.

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JUST PUBLISHED
Vol. 35, Issue 3, July 2022: Journal of Population Economics: 15 articles
https://link.springer.com/journal/148/volumes-and-issues/35-3

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