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Journal Article

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


Publication date

05 Nov 2021


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





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


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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

    1. Poverty
    2. Welfare Benefits
    3. Income Dynamics
    4. Microsimulation
    5. Taxation
    6. Covid 19


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