TY - JOUR
T1 - Estimating the Impact of Covid-19 and Policy Responses on Australian Income Distribution using Incomplete Data
AU - Li, Jinjing
AU - Vidyattama, Yogi
AU - La, Hai Anh
AU - Miranti, Riyana
AU - Sologon, Denisa
PY - 2022/7
Y1 - 2022/7
N2 - This paper undertakes a near real-time analysis of the income distribution effects of the COVID-19 crisis in Australia to understand the ongoing changes in the income distribution as well as the impact of policy responses. By semi-parametrically combining incomplete observed data from three different sources, namely, the Monthly Longitudinal Labour Force Survey, the Survey of Income and Housing and the administrative payroll data, we estimate the impact of COVID-19 and the associated policy responses on the Australian income distribution between February and June 2020, covering the immediate periods before and after the initial outbreak. Our results suggest that despite the growth in unemployment, the Gini of the equalised disposable income inequality dropped by nearly 0.03 point since February. The reduction is because of the additional wage subsidies and welfare supports offered as part of the policy response, offsetting a potential surge in income inequality. Additionally, the poverty rate, which could have been doubled in the absence of the government response, also reduced by 3 to 4 percentage points. The result shows the effectiveness of temporary policy measures in maintaining both the living standards and the level of income inequality. However, the heavy reliance on the support measures raises the possibility that the changes in the income distribution may be reversed and even substantially worsened off should the measures be withdrawn.
AB - This paper undertakes a near real-time analysis of the income distribution effects of the COVID-19 crisis in Australia to understand the ongoing changes in the income distribution as well as the impact of policy responses. By semi-parametrically combining incomplete observed data from three different sources, namely, the Monthly Longitudinal Labour Force Survey, the Survey of Income and Housing and the administrative payroll data, we estimate the impact of COVID-19 and the associated policy responses on the Australian income distribution between February and June 2020, covering the immediate periods before and after the initial outbreak. Our results suggest that despite the growth in unemployment, the Gini of the equalised disposable income inequality dropped by nearly 0.03 point since February. The reduction is because of the additional wage subsidies and welfare supports offered as part of the policy response, offsetting a potential surge in income inequality. Additionally, the poverty rate, which could have been doubled in the absence of the government response, also reduced by 3 to 4 percentage points. The result shows the effectiveness of temporary policy measures in maintaining both the living standards and the level of income inequality. However, the heavy reliance on the support measures raises the possibility that the changes in the income distribution may be reversed and even substantially worsened off should the measures be withdrawn.
KW - COVID-19
KW - Australia
KW - poverty
KW - income inequlity
UR - http://www.scopus.com/inward/record.url?scp=85118112010&partnerID=8YFLogxK
UR - https://www.mendeley.com/catalogue/6f6ae91b-550a-3015-a225-db05a98132e3/
U2 - 10.1007/s11205-021-02826-0
DO - 10.1007/s11205-021-02826-0
M3 - Article
C2 - 34720335
SN - 0303-8300
VL - 162
SP - 1
EP - 31
JO - Social Indicators Research
JF - Social Indicators Research
IS - 1
ER -