Changes in household income during COVID-19: a longitudinal analysis

Abstract

This paper investigates how Italian household income has changed across different stages of COVID-19 after considering the effects of support measures taken by the government to lessen the detrimental economic impact of the pandemic. We use longitudinal microdata from six waves of a nationally representative household survey conducted by the Bank of Italy at various points in time during 2020 and most of 2021. Panel data results show an improvement or at least no deterioration in the household’s financial situation following the initial negative shock of COVID-19 in early 2020. Additionally, while our estimates suggest that the economic crisis instigated by COVID-19 has not had any differential effect by household area of residence and household size, the level of education of the household head seems to matter. Specifically, households headed by individuals with higher education are less likely to have been financially harmed by the pandemic than those headed by individuals with a lower level of education.