Living with Reduced Income
An Analysis of Household Financial Vulnerability Under Covid-19
Bibliographic Data
| ID | 2064083 |
|---|---|
| Authors | Catarina Midões (0000-0003-4058-9182, Ca' Foscari University of Venice), Mateo Seré (0000-0003-4712-8426, University of Antwerp, corresponding author) |
| Year | 2022 |
| Volume | 161 |
| Issue | 1 |
| Pages | 125-149 |
| Publication date | 2022-05-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Social Indicators Research (JOURNAL) |
| Journal identifiers | ISSN: 0303-8300 • E-ISSN: 1573-0921 |
| Publisher | Springer Science and Business Media LLC (PUBLISHER) |
| DOI | 10.1007/s11205-021-02811-7 |
| PMID | 34642535 |
| OpenAlex | W3205813136 |
| Language | EN |
| Citations received | 20 |
| References cited | 26 |
The COVID-19 crisis has led to substantial reductions in earnings. We propose a new measure of financial vulnerability, computable through survey data, to determine whether households can withstand a certain income shock for a defined period of time. Using data from the ECB Household Finance and Consumption Survey (HFCS) we analyse financial vulnerability in seven EU countries. We find that, out of the 243 million individuals considered, 47 million are vulnerable to a three month long income shock (the average length of the first wave COVID-19 lockdown), i.e., they cannot afford food and housing expenses for three months without privately earned income. Differences across countries are stark. Individuals born outside the EU are especially likely to be vulnerable. Being younger, a single parent, and a woman are also statistically significant risk factors. Through a tax-benefit microsimulation exercise, we look into the COVID-19 employment protection benefits, the largest income support measure in the countries considered. Considering as our sample individuals in households where someone receives a salary, we derive household net income when employees are laid-off and awarded the COVID-19 employment protection benefits enacted. Our findings suggest that the employment protection schemes are extremely effective in reducing the number of vulnerable individuals. The relative importance of rent and mortgage suspensions, (likewise, widespread COVID-19 policies), in alleviating vulnerability, is highly country dependent
Business · Consumption (sociology · Demographic economics · Earnings · Economics · Geography · Household income · Income Support · Salary · Shock (circulatory · Survey data collection · Survey of Income and Program Participation · Vulnerability (computing · COVID-19 Pandemic Impacts · Employment and Welfare Studies · Financial Literacy, Pension, Retirement Analysis · Finance
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| Unique citing works | 20 |
|---|---|
| Citations per year | 5 |
| Citation span | 2022 - 2026 (5) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 20 |