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How effective were measures introduced in the COVID-19 crisis in supporting household incomes?

Author

Listed:
  • Susanne Maidorn

    (Office of the Fiscal Advisory Council)

  • Lukas Reiss

    (Oesterreichische Nationalbank, Economic Analysis Division)

Abstract

We analyze the distributional effects of both, the COVID-19 crisis and the measures introduced to support household incomes, using the microsimulation model developed by the Office of the Fiscal Advisory Council (FISKSIM). In 2020, more than one-third of Austrian households were affected, at least temporarily, by unemployment, short-time work or losses in self-employed income. The fiscal measures to support household incomes clearly cushioned the financial impact of the crisis on households. They proved particularly effective in two ways: First, lower- income households benefited more (vertical effectiveness); second, within individual income brackets, those households that had experienced higher losses due to the COVID-19 shock benefited more strongly from support measures (horizontal effectiveness). This was achieved mostly by the establishment of the hardship fund and one-off payments to unemployed workers.

Suggested Citation

  • Susanne Maidorn & Lukas Reiss, 2021. "How effective were measures introduced in the COVID-19 crisis in supporting household incomes?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q3/21, pages 23-37.
    • Handle: RePEc:onb:oenbmp:y:2021:i:q3/21:b:2
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    File URL: https://www.oenb.at/dam/jcr:21fb73a1-1b16-466a-ab59-b16448727a54/04_mop_q3_21_How-effective-were-measures-introduced-in-the-COVID-19-crisis-in-supporting-household-incomes.pdf
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    References listed on IDEAS

    as
    1. Michael Christl & Silvia De Poli & Dénes Kucsera & Hanno Lorenz, 2022. "COVID-19 and (gender) inequality in income: the impact of discretionary policy measures in Austria," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-17, December.
    2. Nicolas Albacete & Pirmin Fessler & Fabian Kalleitner & Peter Lindner, 2021. "How has COVID-19 affected the financial situation of households in Austria?," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/20-Q1/, pages 111-130.
    3. Josef Baumgartner & Marian Fink & Caroline Moreau & Silvia Rocha-Akis & Sarah Lappöhn & Kerstin Plank & Alexander Schnabl & Klaus Weyerstrass, 2020. "Wirkung der wirtschaftspolitischen Maßnahmen zur Abfederung der COVID-19-Krise. Mikro- und makroökonomische Analysen zur konjunkturellen, fiskalischen und verteilungspolitischen Wirkung," WIFO Studies, WIFO, number 66958, April.
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    More about this item

    Keywords

    fiscal stabilization measures; income distribution;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • D30 - Microeconomics - - Distribution - - - General

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