A national lifebuoy for incomes during the pandemic. Simulations on the effects of COVID-19-related policies in Italy

Martedì, 13 ottobre 2020, ore 14.15

Autore:  Giovanni Gallo (Inapp - Unimore)

This paper aims to assess to what extent the COVID-19 outbreak is expected to affect income levels of workers and households. Considering Italy as a case study, we also want to explore whether policies developed by the national government to contrast the effects of the recent pandemic (e.g. unemployment benefits, bonus for self-employed, Emergency Income) may represent an effective limit to the upcoming economic recession, and thus a moderator of potential increases on levels of income poverty and inequality. In the analysis, we distinguish three scenarios with different degrees of economic impact of the novel coronavirus and related emergency social transfers: a) until May 2020; b) until August 2020; c) until December 2020. Based on the application of a static tax-benefit microsimulation model on IT-SILC 2017 data, our results show that COVID-19 should severely decrease market income levels in Italy, especially among the youngest, the poorest, and those living in the northern regions or working in "non-essential" activities. As a consequence, the outbreak should significantly increase levels of income poverty and inequality among Italian households. However, thanks to the strong low-income targeting highlighted by national policies, the COVID-19 effect on poverty rates should be largely limited and the one on inequality levels may overall become slightly progressive.

 

[Ultimo aggiornamento: 12/10/2020 11:48:02]