Abstract
We here use panel data from the COME-HERE survey to track income inequality during COVID-19 in France, Germany, Italy, and Spain. Relative inequality in equivalent household disposable income among individuals changed in a hump-shaped way between January 2020 and January 2021, with an initial rise from January to May 2020 being more than reversed by September 2020. Absolute inequality also fell over this period. Due to the pandemic some households lost more than others, and government compensation schemes were targeted towards the poorest, implying that on average income differences decreased. Generalized Lorenz domination reveals that these distributive changes reduced welfare in Italy.
Highlights
At the time of writing, over 150,000,000 cases of COVID-19 have been reported globally, and the number of new infections in some Western European countries like France, Germany, Italy and Spain is just starting to fall thanks to vaccination campaigns
Grabka (2021) analysed the COVID-19 sample of the German Socio-Economic Panel (SOEP), and showed that the Gini coefficient on current net monthly household income in Germany was slightly lower during the second lockdown of January/February 2021 as compared to its 2019 value
The data we use here are from the COME-HERE (COVID-19, MEntal HEalth, REsilience and Self-regulation) panel survey collected by the University of Luxembourg
Summary
At the time of writing, over 150,000,000 cases of COVID-19 have been reported globally, and the number of new infections in some Western European countries like France, Germany, Italy and Spain is just starting to fall thanks to vaccination campaigns. In line with epidemiological models (Ferguson et al 2020; Lourenco et al 2020), many governments adopted policies starting in March 2020 that aimed to restrict population movement (such as lockdowns, travel restrictions and curfews). The rationale for these restrictions was to save lives and prevent health systems from being overwhelmed. These restrictive policies have produced unprecedented effects on household incomes, which governments have addressed via extraordinary measures such as furlough payments and the direct support targeted at those who were more in need during the pandemic.
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