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The fall in income inequality during COVID-19 in four European countries

A Correction to this article was published on 18 February 2022

This article has been updated

Abstract

We here use panel data from the COME-HERE survey to track income inequality during COVID-19 in France, Germany, Italy, and Spain. Relative inequality in equivalent household disposable income among individuals changed in a hump-shaped way between January 2020 and January 2021, with an initial rise from January to May 2020 being more than reversed by September 2020. Absolute inequality also fell over this period. Due to the pandemic some households lost more than others, and government compensation schemes were targeted towards the poorest, implying that on average income differences decreased. Generalized Lorenz domination reveals that these distributive changes reduced welfare in Italy.

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Correspondence to Conchita D’Ambrosio.

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We would like to thank Thomas Blanchet, Liyousew Borga, Walter Bossert, Michael Förster, Markus Grabka, Sebastian Königs, Giorgia Menta, Vincent Vergnat, Remi Yin and participants at the OECD WISE Webinar Series on COVID-19 and Inequality and a seminar at the University of Luxembourg for their help and feedback. We also thank the Editor, Andreas Peichl, and two anonymous referees for comments that helped improve the paper. Financial support from the French Agence Nationale de la Recherche (DYNPANDEMIC), André Losch Fondation, Art2Cure, Cargolux, and the Fonds National de la Recherche Luxembourg (Grant COVID-19/2020-2/14840950/COME-HERE) is gratefully acknowledged. Andrew Clark acknowledges financial support from the EUR grant ANR-17-EURE-0001.

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Clark, A.E., D’Ambrosio, C. & Lepinteur, A. The fall in income inequality during COVID-19 in four European countries. J Econ Inequal 19, 489–507 (2021). https://doi.org/10.1007/s10888-021-09499-2

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  • DOI: https://doi.org/10.1007/s10888-021-09499-2

Keywords

  • COME-HERE
  • COVID-19
  • Income inequality

JEL Classification

  • D63
  • I32
  • I38