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The idiosyncratic impact of an aggregate shock: the distributional consequences of COVID-19

Author

Listed:
  • Michaela Benzeval

    (Institute for Fiscal Studies)

  • Jon Burton

    (Institute for Fiscal Studies)

  • Thomas Crossley

    (Institute for Fiscal Studies and University of Essex and European University Institute)

  • Paul Fisher

    (Institute for Fiscal Studies)

  • Annette Jäckle

    (Institute for Fiscal Studies)

  • Hamish Low

    (Institute for Fiscal Studies and University of Oxford & Nuffield College)

  • Brendan Read

    (Institute for Fiscal Studies)

Abstract
Using new data from the Understanding Society: COVID 19 survey collected in April 2020, we show how the aggregate shock caused by the pandemic a?ects individuals across the distribution. The survey collects data from existing members of the Under-standing Society panel survey who have been followed for up to 10 years. Understand-ing society is based on probability samples and the Understanding Society Covid19 Survey is carefully constructed to support valid population inferences. Further the panel allows comparisons with a pre-pandemic baseline. We document how the shock of the pandemic translates into di?erent economic shocks for di?erent types of worker: those with less education and precarious employment face the biggest economic shocks. Some of those a?ected are able to mitigate the impact of the economic shocks: universal credit protects those in the bottom quintile, for example. We estimate the prevalence of the di?erent measures individuals and households take to mitigate the shocks. We show that the opportunities for mitigation are most limited for those most in need.

Suggested Citation

  • Michaela Benzeval & Jon Burton & Thomas Crossley & Paul Fisher & Annette Jäckle & Hamish Low & Brendan Read, 2020. "The idiosyncratic impact of an aggregate shock: the distributional consequences of COVID-19," IFS Working Papers W20/15, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:20/15
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    Cited by:

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    2. Foremny, Dirk & Sorribas-Navarro, Pilar & Vall Castelló, Judit, 2024. "Income insecurity and mental health in pandemic times," Economics & Human Biology, Elsevier, vol. 53(C).
    3. Ainaa, Carmen & Brunetti, Irene & Mussida, Chiara & Scicchitano, Sergio, 2021. "Who lost the most? Distributive effects of COVID-19 pandemic," GLO Discussion Paper Series 829, Global Labor Organization (GLO).
    4. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2020. "Inequality in the impact of the coronavirus shock: Evidence from real time surveys," Journal of Public Economics, Elsevier, vol. 189(C).
    5. Mathias Huebener & Sevrin Waights & C. Katharina Spiess & Nico A. Siegel & Gert G. Wagner, 2021. "Parental well-being in times of Covid-19 in Germany," Review of Economics of the Household, Springer, vol. 19(1), pages 91-122, March.
    6. Suphanit Piyapromdee & Peter Spittal, 2020. "The Income and Consumption Effects of COVID‐19 and the Role of Public Policy," Fiscal Studies, John Wiley & Sons, vol. 41(4), pages 805-827, December.
    7. Crossley, Thomas F. & Fisher, Paul & Low, Hamish, 2021. "The heterogeneous and regressive consequences of COVID-19: Evidence from high quality panel data," Journal of Public Economics, Elsevier, vol. 193(C).
    8. Lea Immel & Florian Neumeier & Andreas Peichl, 2022. "The Unequal Consequences of the Covid‐19 Pandemic: Evidence from a Large Representative German Population Survey," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(2), pages 471-496, June.
    9. Abi Adams‐Prassl & Teodora Boneva & Marta Golin & Christopher Rauh, 2020. "Furloughing," Fiscal Studies, John Wiley & Sons, vol. 41(3), pages 591-622, September.
    10. Stojetz, Wolfgang & Ferguson, Neil T.N. & Baliki, Ghassan & Díaz, Oscar & Elfes, Jan & Esenaliev, Damir & Freudenreich, Hanna & Koebach, Anke & Abreu, Liliana & Peitz, Laura & Todua, Ani & Schreiner, , 2022. "The Life with Corona survey," Social Science & Medicine, Elsevier, vol. 306(C).
    11. Juan Laborda & Pilar Rivera-Torres & Vicente Salas-Fumas & Cristina Suárez, 2021. "Is there life beyond the Spanish government’s aid to furloughed employees by COVID-19?," PLOS ONE, Public Library of Science, vol. 16(6), pages 1-21, June.
    12. Schettino, Francesco & Scicchitano, Sergio & Suppa, Domenico, 2024. "COVID 19 and Wage Polarization: A task based approach," GLO Discussion Paper Series 1398, Global Labor Organization (GLO).
    13. Etheridge, Ben & Spantig, Lisa, 2020. "The gender gap in mental well-being during the Covid-19 outbreak: evidence from the UK," ISER Working Paper Series 2020-08, Institute for Social and Economic Research.
    14. Hans-Martin von Gaudecker & Radost Holler & Lena Janys & Bettina Sifinger & Christian Zimpelmann, 2020. "Labour Supply during Lockdown and a “New Normal”: The Case of the Netherlands Abstract: We document the evolution of hours of work using monthly data from February to June 2020. During this period, th," ECONtribute Discussion Papers Series 025, University of Bonn and University of Cologne, Germany.
    15. Thiemo Fetzer, 2022. "Subsidising the spread of COVID-19: Evidence from the UK’S Eat-Out-to-Help-Out Scheme," The Economic Journal, Royal Economic Society, vol. 132(643), pages 1200-1217.
    16. Yi Cheng & Muhammad Nadeem & Shamsheer ul Haq & Kyalisiima Prisca & Babar Aziz & Muhammad Imran & Pomi Shahbaz, 2022. "Maintaining Quality of Life during the Pandemic: Managing Economic, Social, and Health Well-Being Amid the COVID-19 Crisis of Agricultural Entrepreneurs," Sustainability, MDPI, vol. 14(23), pages 1-15, November.
    17. Kosteas, Vasilios D. & Renna, Francesco & Scicchitano, Sergio, 2022. "Covid-19 and Working from Home: toward a "new normal"?," GLO Discussion Paper Series 1013, Global Labor Organization (GLO).
    18. Etheridge, Ben & Spantig, Lisa, 2022. "The gender gap in mental well-being at the onset of the Covid-19 pandemic: Evidence from the UK," European Economic Review, Elsevier, vol. 145(C).
    19. Thomas F Crossley & Paul Fisher & Hamish Low & Peter Levell, 2023. "A year of COVID: the evolution of labour market and financial inequalities through the crisis," Oxford Economic Papers, Oxford University Press, vol. 75(3), pages 589-612.
    20. Corinne Dubois & Luisa Lambertini & Yu Wu, 2022. "Gender effects of the COVID-19 pandemic in the Swiss labor market," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-29, December.
    21. Jules Linden & Cathal O'Donoghue & Denisa M. Sologon, 2021. "The Structure and Incentives of a COVID related Emergency Wage Subsidy," Papers 2108.04198, arXiv.org.
    22. Timothy Besley & Nicholas Stern, 2020. "The Economics of Lockdown," Fiscal Studies, John Wiley & Sons, vol. 41(3), pages 493-513, September.
    23. Giovanni Gallo & Michele Raitano, 2020. "SOS incomes: Simulated effects of COVID-19 and emergency benefits on individual and household income distribution in Italy," Working Papers 566, ECINEQ, Society for the Study of Economic Inequality.
    24. Anna Zamberlan & Filippo Gioachin & Davide Gritti, 2022. "Gender inequality in domestic chores over ten months of the UK COVID-19 pandemic: Heterogeneous adjustments to partners’ changes in working hours," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 46(19), pages 565-580.
    25. Carmen Aina & Irene Brunetti & Chiara Mussida & Sergio Scicchitano, 2023. "Distributional effects of COVID-19," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(1), pages 221-256, March.

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    More about this item

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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