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The Income and Consumption Effects of Covid-19 and the Role of Public Policy

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  • Suphanit Piyapromdee
  • Peter Spittal

Abstract

We provide empirical evidence on the labour market impacts of covid-19 in the UK and assess the effectiveness of mitigation policies. We estimate the relationship between employment outcomes and occupational and industrial characteristics and assess the effects on consumption. 70 percent of households in the bottom fifth of the income distribution must cut consumption within one week. Finally, we compare the effectiveness the UK’s Coronavirus Job Retention Scheme to Economic Impact Payments in the US. The EIPs are more effective at mitigating consumption reductions as they have full coverage, depend on household structure and are higher for low-income workers.

Suggested Citation

  • Suphanit Piyapromdee & Peter Spittal, 2020. "The Income and Consumption Effects of Covid-19 and the Role of Public Policy," Bristol Economics Discussion Papers 20/727, School of Economics, University of Bristol, UK.
  • Handle: RePEc:bri:uobdis:20/727
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    References listed on IDEAS

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    1. Warn N. Lekfuangfu & Suphanit Piyapromdee & Ponpoje Porapakkarm & Nada Wasi, 2020. "On Covid-19: New Implications of Job Task Requirements and Spouse's Occupational Sorting," PIER Discussion Papers 133, Puey Ungphakorn Institute for Economic Research, revised Apr 2020.
    2. R Maria del Rio-Chanona & Penny Mealy & Anton Pichler & François Lafond & J Doyne Farmer, 2020. "Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective," Oxford Review of Economic Policy, Oxford University Press, vol. 36(Supplemen), pages 94-137.
    3. Orazio Attanasio & Gabriella Berloffa & Richard Blundell & Ian Preston, 2002. "From Earnings Inequality to Consumption Inequality," Economic Journal, Royal Economic Society, vol. 112(478), pages 52-59, March.
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    Cited by:

    1. Abi Adams‐Prassl & Teodora Boneva & Marta Golin & Christopher Rauh, 2020. "Furloughing," Fiscal Studies, John Wiley & Sons, vol. 41(3), pages 591-622, September.

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