A Microsimulation Analysis of the Distributional Impact over the Three Waves of the COVID-19 Crisis in Ireland

Cathal O’Donoghue, Denisa Sologon, Iryna Kyzyma, John McHale

Research output: Working paper

Abstract

This paper relies on a microsimulation framework to undertake an analysis of the distributional implications of the COVID-19 crisis over three waves. Given the lack of real-time survey data during the fast moving crisis, it applies a nowcasting methodology and real-time aggregate administrative data to calibrate an income survey and to simulate changes in the tax benefit system that attempted to mitigate the impacts of the crisis. Our analysis shows how crisis-induced income-support policy innovations combined with existing progressive elements of the tax-benefit system were effective in avoiding an increase in income inequality at all stages of waves 1-3 of the COVID-19 emergency in Ireland. There was, however, a decline in generosity over time as benefits became more targeted. On a methodological level, our paper makes a specific contribution in relation to the choice of welfare measure in assessing the impact of the COVID-19 crisis on inequality.
Original languageEnglish
Place of PublicationEssex
PublisherEuromod - University of Essex
Pages26
Publication statusPublished - 15 Mar 2021

Publication series

NameCeMPA Working Paper Series
PublisherUniversity of Essex
No.01/21

Bibliographical note

This article was also submitted and deposit in arXiv : a free distribution service and an open-access archive.

Keywords

  • COVID-19
  • distributional impact
  • fiscal policy
  • income distribution
  • income generation model
  • inequality
  • microsimulation
  • nowcasting
  • poverty

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