The COVID-19 outbreak in 2020-2021 brought unprecedented disruptions to the EU economies, leading to a large reduction in the GDP across all EU Member States. Households faced an increased risk of unemployment and economic activity due to lockdown measures. Member States responded to the Covid-19 crisis by introducing unprecedented discretionary policy measures, such as Monetary Compensation (MC) schemes. These are short-term earnings replacement schemes aimed at compensating employees and the self-employed for the reduction in their economic activity due to lockdowns. In addition, many governments significantly adjusted their existing policy measures to cushion the reduction in household income, e.g. through increases in the coverage and generosity of sick leave benefits, social assistance, and various ad-hoc cash payments.
Quantifying the effect of the pandemic on earnings and incomes is complicated by the fact that most representative surveys which contain information on earnings, income, taxes and benefits, are released with (at least) a two-year lag. For instance, the latest release of the EU Survey of Income and Living (EU-SILC) contains data for 2020 with the incomes for 2019. When sudden changes in economic conditions such as COVID-19 occur, this time lag hinders a timely analysis of these shocks. The Labour Force Survey is available every quarter at a 6-week lag, yet its main limitation is the lack of continuous measures of earnings and incomes.
This project provides a quantitative assessment of the gendered impacts of the pandemic and the related policy response on earnings and disposable incomes across the EU-27. We use established nowcasting (Navicke, Rastrigina et al. 2014) and decomposition techniques (Bargain and Callan 2010, Paulus and Tasseva 2020) together with the EU-wide microsimulation model EUROMOD (https://euromod-web.jrc.ec.europa.eu/) to isolate changes in the distribution of disposable income due to changes in tax-benefit policies introduced to counteract the impact of COVID-19 lockdowns on incomes of the population, from the effects of other factors, such as changes in market incomes, demographic and labour market characteristics of the population. In addition, EUROMOD is used to construct a gender sensitive measure of individual disposable income which accounts for intrahousehold income inequality following the approach developed by Avram, Popova et al. (2016), Avram and Popova (2022).
Read our report: Evidence to Action: Gender equality and gender mainstreaming in the COVID-19 recovery
Team members
Senior Research Fellow
Senior Research Fellow
