Journal Article

The role of automatic stabilizers and emergency tax-benefit policies during the COVID-19 pandemic: evidence from Ecuador

Authors

Publication date

05 Nov 2021

Summary

By combining household survey data before and during the COVID-19 pandemic with detailed tax-benefit simulations, this paper quantifies the distributional effects of COVID-19 in Ecuador and the role of tax–benefit policies in mitigating the immediate impact of the economic shocks. Our results show a dramatic increase in income poverty and inequality between December 2019 and June 2020, the period when the economy was hit the hardest. The national poverty headcount increases from 25.7 to 58.2%, the extreme poverty headcount from 9.2 to 38.6%, and the Gini coefficient from 0.461 to 0.592. On average, household disposable income drops by 41%. The new Family Protection Grant provides income protection for the poorest income decile. However, overall tax–benefit policies do little to mitigate the losses in household incomes due to the pandemic. Informal workers, in particular, are left unprotected due to the lack of income support in the event of unemployment.

Published in

The European Journal of Development Research

DOI

https://doi.org/10.1057/s41287-021-00490-1

ISSN

16

Subjects

Poverty, Welfare Benefits, Income Dynamics, Microsimulation, Taxation, and Covid 19

Links

University of Essex, Albert Sloman Library Periodicals *restricted to University of Essex registered users* - http://catalogue.essex.ac.uk/record=b1597715~S5

Notes

Online Early

Related publications

1. The role of automatic stabilizers and emergency tax-benefit policies during the COVID-19 pandemic in Ecuador

   Holguer Xavier Jara Tamayo, Lourdes Montesdeoca, and Iva Valentinova Tasseva

   Research Paper, WIDER Working Papers, 2021/4 - Jan 2021
   1. Poverty
   2. Welfare Benefits
   3. Income Dynamics
   4. Microsimulation
   5. Taxation
   6. Covid 19

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