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Earnings Losses and the Role of the Welfare State During the COVID‐19 Pandemic: Evidence from Sweden

Author

Listed:
  • Adrian Adermon
  • Lisa Laun
  • Patrik Lind
  • Martin Olsson
  • Jan Sauermann
  • Anna Sjögren

Abstract

Many governments introduced temporary adjustments to counter the economic and health consequences of the COVID‐19 pandemic. We study the importance of already‐existing government transfers and new pandemic measures to mitigate individual income losses during the onset of the pandemic in Sweden using a difference‐in‐differences approach and population‐wide data on monthly earnings and government transfer payments. We find that labor earnings dropped by 2.7 percent in 2020. Existing transfers and new pandemic measures reduced earnings losses to 1.5 percent. These average effects mask considerable differences in earnings losses, which were, by and large, evened out by existing transfers and new pandemic measures.

Suggested Citation

  • Adrian Adermon & Lisa Laun & Patrik Lind & Martin Olsson & Jan Sauermann & Anna Sjögren, 2024. "Earnings Losses and the Role of the Welfare State During the COVID‐19 Pandemic: Evidence from Sweden," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(4), pages 981-1010, December.
    • Handle: RePEc:bla:revinw:v:70:y:2024:i:4:p:981-1010
    DOI: 10.1111/roiw.12670
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    Cited by:

    1. Buhmann, Mara & Pohlan, Laura & Duncan, Roth, 2023. "The Covid-19 Pandemic and Transitions out of Unemployment," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277678, Verein für Socialpolitik / German Economic Association.
    2. Nikolay Angelov & Daniel Waldenström, 2023. "The Economic Effects of Covid-19 in Sweden: A Report on Income, Taxes, Distribution, and Government Support Policies," CESifo Working Paper Series 10547, CESifo.
    3. Kronenberg, Christoph & Gerdtham, Ulf-Göran & Karlsson, Martin, 2025. "Remote Schooling during the Pandemic: A Double Burden for Working Parents in Sweden?," CINCH Working Paper Series (since 2020) 83571, Duisburg-Essen University Library, DuEPublico.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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