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COVID-19 and (gender) inequality in income: the impact of discretionary policy measures in Austria

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This paper analyzes the impact of the COVID-19 crisis on household income in Austria, using detailed administrative labor market data, in combination with micro-simulation techniques, that enable specific labor market transitions to be modeled. We find that discretionary fiscal policy measures in Austria are key to counteracting the inequality- and poverty-enhancing effect of COVID-19. Additionally, we find that females tend to experience a greater loss in terms of market income. The Austrian tax-benefit system, however, reduces this gender differences. Disposable income has dropped by around 1% for both males and females. By comparison, males profit mainly from short-time work scheme, while females profit especially from other discretionary policy measures, such as the one-off payment for children.

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  • Michael Christl & Silvia De Poli & Denes Kucsera & Hanno Lorenz, 2021. "COVID-19 and (gender) inequality in income: the impact of discretionary policy measures in Austria," JRC Working Papers on Taxation & Structural Reforms 2021-05, Joint Research Centre.
    • Handle: RePEc:ipt:taxref:202105
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    1. 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.
    2. Glenn Abela, 2022. "Assessing the impacts of the COVID-19 wage supplement scheme: A microsimulation study," CBM Working Papers WP/06/2022, Central Bank of Malta.
    3. Adermon, Adrian & Laun, Lisa & Lind, Patrik & Olsson, Martin & Sauermann, Jan & Sjögren , Anna, 2022. "Earnings losses and the role of the welfare state during the COVID-19 pandemic: evidence from Sweden," Working Paper Series 2022:20, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Michael Christl & Silvia Poli & Tine Hufkens & Andreas Peichl & Mattia Ricci, 2023. "The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(4), pages 1107-1136, August.

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    Keywords

    COVID-19; EUROMOD; microsimulation; short-time work; automatic stabilisers;
    All these keywords.

    JEL classification:

    • 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
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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