Abstract
Latin American governments swiftly implemented income assistance programs to sustain families' livelihoods during COVID-19 stay-at-home orders. This paper analyzes the potential coverage and generosity of these measures and assesses the suitability of current safety nets to deal with unexpected negative income shocks in 10 Latin American countries. The expansion of pre-existing programs (most notably conditional cash transfers and non-contributory pensions) during the COVID-19 crisis was generally insufficient to compensate for the inability to work among the poorest segments of the population. When COVID-19 ad hoc programs are analyzed, the coverage and replacement rates of regular labor income among households in the first quintile of the country's labor income distribution increase substantially. Yet, these programs present substantial coverage challenges among families composed of fundamentally informal workers who are non-poor, but are at a high risk of poverty. These results highlight the limitations of the fragmented nature of social protection systems in the region.
Highlights
At the beginning of the pandemic, governments around the world took immediate measures to contain the spread of the strain of coronavirus that has caused COVID-19, prioritizing in almost all cases some form of social isolation or distancing
This paper provides an ex ante evaluation of the potential coverage and generosity of the COVID-19 emergency social assistance programs in 10 Latin American countries
At the onset of the COVID-19 pandemic, Latin American governments took aggressive steps to save lives by imposing shelter-in-place measures to stop the propagation of the virus
Summary
At the beginning of the pandemic, governments around the world took immediate measures to contain the spread of the strain of coronavirus that has caused COVID-19, prioritizing in almost all cases some form of social isolation or distancing. We derive the coverage of the emergency programs and a measure of the potential replacement rate that compares the total transfer that each household may receive as a share of its regular labor income. The second section of the paper describes the emergency social assistance programs in place in each country and how they were mapped to identify potential beneficiaries in household surveys. 45 percent of the households in the first earnings quintile received an emergency transfer through the preexisting infrastructure of the social safety net, but this varies substantially across countries, with coverages as low as 5 percent in Ecuador and as much as 80 percent in Brazil. Argentina Bolivia Brazil Chile Colombia Dominican Republic Ecuador El Salvador Peru Uruguay LAC
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