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The role of automatic stabilizers and emergency tax-benefit policies during the COVID-19 pandemic in Ecuador

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  • Xavier Jara
  • Lourdes Montesdeoca
  • Iva V. Tasseva

Abstract

This paper makes use of tax-benefit microsimulation techniques to quantify the distributional effects of COVID-19 in Ecuador and the role of tax-benefit policies in mitigating the immediate impact of the economic shocks. Our results show a dramatic increase in income poverty and inequality between December 2019 and June 2020. The poverty rate, measured with the national poverty line, goes up from 25.7 to 58.2 per cent over this period and extreme poverty increases from 9.2 to 38.6 per cent. Inequality measured by the Gini coefficient increases substantially from 0.461 to 0.592.

Suggested Citation

  • Xavier Jara & Lourdes Montesdeoca & Iva V. Tasseva, 2021. "The role of automatic stabilizers and emergency tax-benefit policies during the COVID-19 pandemic in Ecuador," WIDER Working Paper Series wp-2021-4, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-4
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    References listed on IDEAS

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    2. Emilio Espino & Martín González Rozada, 2012. "Automatic Stabilization and Fiscal Policy: Some Quantitative Implications for Latin America and the Caribbean," IDB Publications (Working Papers) 78038, Inter-American Development Bank.
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    5. Espino, Emilio & González Rozada, Martín, 2012. "Automatic Stabilization and Fiscal Policy: Some Quantitative Implications for Latin America and the Caribbean," IDB Publications (Working Papers) 4130, Inter-American Development Bank.
    6. Christian Daude & Ángel Melguizo & Alejandro Neut, 2010. "Fiscal Policy in Latin America: Countercyclical and Sustainable at Last?," OECD Development Centre Working Papers 291, OECD Publishing.
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    Cited by:

    1. Helen Barnes & Gabriel Espi-Sanchis & Murray Leibbrandt & David McLennan & Michael Noble & Jukka Olavi Pirttilä & Wynnona Steyn & Brenton Van Vrede & Gemma Wright, 2021. "Analysis of the Distributional Effects of COVID-19 and State-led Remedial Measures in South Africa," International Journal of Microsimulation, International Microsimulation Association, vol. 14(2), pages 2-31.
    2. Magalasi, Chimwemwe, 2021. "The short-term distributional impact of COVID-19 in Malawi," EUROMOD Working Papers EM7/21, EUROMOD at the Institute for Social and Economic Research.
    3. María Gabriela Palacio Ludeña, 2021. "Falling through the Cracks: Digital Infrastructures of Social Protection in Ecuador," Development and Change, International Institute of Social Studies, vol. 52(4), pages 805-828, July.
    4. Meltem A. Aran & Nazli Aktakke & Zehra Sena Kibar & Emre Üçkardeşler, 2022. "How to Assess the Child Poverty and Distributional Impact of COVID-19 Using Household Budget Surveys: An Application Using Turkish Data," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 1997-2037, August.
    5. Luis Huesca & Linda Llamas & H. Xavier Jara & César O. Vargas Téllez & David Rodríguez, 2021. "The impact of the COVID-19 pandemic on poverty and inequality in Mexico," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(3), pages 1-19, Julio - S.

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