RT Report
T1 Wage inequality and poverty effects of lockdown and social distancing in Europe
A1 Palomino Quintana, Juan César
A1 Rodríguez Hernández, Juan Gabriel
A1 Sebastián Lago, Raquel
AB Social distancing and lockdown measures taken to contain the spread of COVID-19 may have distributional economic costs beyond the contraction of GDP. Here we evaluate the capacity of individuals to work under a lockdown based on a Lockdown Working Ability index which considers their teleworking capacity and whether their occupation is essential or closed. Our analysis reveals substantial and uneven potential wage losses across the distribution all around Europe and we consistently find that both poverty and wage inequality rise in all European countries. Under four different scenarios (2 months of lockdown and 2 months of lockdown plus 6 months of partial functioning of closed occupations at 80%, 70% and 60% of full capacity) we estimate for 29 European countries an average increase in the headcount poverty index that goes from 4.9 to 9.4 percentage points and a mean loss rate for poor workers between 10% and 16.2%. The average increase in the Gini coefficient ranges between 3.5% to 7.3% depending on the scenario considered. Decomposing overall wage inequality in Europe, we find that lockdown and social distance measures produce a double process of divergence: both inequality within and between countries increase.
SN 2341-2356
YR 2020
FD 2020
LK https://hdl.handle.net/20.500.14352/11838
UL https://hdl.handle.net/20.500.14352/11838
LA eng
NO Comunidad de Madrid
NO COTEC Foundation
NO Citi for the Inequality and Prosperity programme Oxford Martin School
DS Docta Complutense
RD 12 may 2025