The Impact of the COVID-19 Crisis on Income Distribution Under Different Protection Schemes: the Case of Spain
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Date
05/10/2020Author
Estado
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I used household survey data to microsimulate the impact of the COVID-19 crisis on income
distribution in Spain. I estimate the cost of potential lockdowns on income under three different
protection scenarios: no minimum income state protection, 2020’s Ingreso Mínimo Vital (IMV) and the
former Renta Mínima de Inserción (RMI). Results show that COVID crisis reduces income for the entire
income distribution and, even in the context of a relatively efficient redistributive system, increases
inequality and poverty at various levels. The IMV approach is the most efficient one in smoothing the
impact of the COVID-19 crisis on income distribution. It may be necessary to rise taxes and to reduce
other expenditure policies to maintain current protection in a context of lower public revenues. I used household survey data to microsimulate the impact of the COVID-19 crisis on income
distribution in Spain. I estimate the cost of potential lockdowns on income under three different
protection scenarios: no minimum income state protection, 2020’s Ingreso Mínimo Vital (IMV) and the
former Renta Mínima de Inserción (RMI). Results show that COVID crisis reduces income for the entire
income distribution and, even in the context of a relatively efficient redistributive system, increases
inequality and poverty at various levels. The IMV approach is the most efficient one in smoothing the
impact of the COVID-19 crisis on income distribution. It may be necessary to rise taxes and to reduce
other expenditure policies to maintain current protection in a context of lower public revenues.
The Impact of the COVID-19 Crisis on Income Distribution Under Different Protection Schemes: the Case of Spain
Tipo de Actividad
Revista electrónicaPalabras Clave
Incidencia fiscal; Desigualdad; Pobreza; Gasto Social; COVID; EspañaFiscal incidence; Inequality; Poverty; Social Spending; COVID; Spain.