Distributional Effects of Macroeconomic Shocks in Real-Time: A Novel Method Applied to the COVID-19 Crisis in Germany

Bruckmeier, Kerstin; Peichl, Andreas; Popp, Martin; Wiemers, Jürgen; Wollmershäuser, Timo

doi:10.2139/ssrn.3746763

Cited by 4 publications

(8 citation statements)

References 17 publications

(19 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Indeed, the impact on disposable income is somehow flattened across the distribution. Our estimated impact is close to the one estimated by Bruckmeier et al ( 2021 ), who predict a fall in disposable income of a similar magnitude. However, differently from us, they find the effect of the COVID-19 crisis to be slightly progressive.…”

Section: Resultssupporting

confidence: 89%

“…The literature on the distributional impact of the Covid crisis for Germany is scarce. In addition to the few papers mentioned above, Bruckmeier et al ( 2021 ) extend the approach of Bargain et al ( 2012 ) and combine macro-and micro-modelling to nowcast the macroeconomic effect of COVID-19 in Germany in 2020. The key difference of their approach to our analysis is in the selection of individuals who experience a shock.…”

Section: Introductionmentioning

confidence: 99%

“…5 This shows the importance of accounting for worker characteristics when simulating labour market transitions in micro data instead of using the sector of activity alone. Moreover, our analysis of income stabilisation effects as well as more detailed STW and DPM responses using counterfactual scenarios is novel compared to Bruckmeier et al ( 2021 ).…”

Section: Introductionmentioning

confidence: 99%

“… 4 To be precise, the approach of Bruckmeier et al ( 2021 ) combines five different tools: (i) a VAR model of output shocks at the industry-level, (ii) a structural labour demand model, (iii) estimated information on employment changes by industry and worker type (by interacting the estimated industry-level output shocks with output elasticities from the labour demand model), (iv) a maximum entropy-based approach to feed these predicted shocks to household micro-data, and (v) a microsimulation model to assess the distributional consequences. Elements (i) and (iv) are new compared to the approach of Bargain et al ( 2012 ).…”

mentioning

confidence: 99%

“… 23 Note, however, there are many more differences of our approach compared to the one of Bruckmeier et al ( 2021 ) including type and scope of data used, detailed inclusion of STW based on administrative data instead of a macro-model-based approach as well as a different microsimulation model. This makes it hard to single out the exact reasons for the differences in results.…”

mentioning

confidence: 99%

See 4 more Smart Citations

The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany

Christl

Poli

Hufkens

et al. 2022

Int Tax Public Finance

Self Cite

View full text Add to dashboard Cite

In this paper, we investigate the impact of the COVID-19 pandemic on German household income in 2020 using a micro-level approach. We combine a microsimulation model with novel labour market transition techniques to simulate the COVID-19 shock on the German labour market. We find the consequences of the labour market shock to be highly regressive with a strong impact on the poorest households. However, this effect is nearly entirely offset by automatic stabilisers and discretionary policy measures. We explore the cushioning effect of these policies in detail, showing that short-time working schemes and especially the one-off payments for children are effective in cushioning the income loss of the poor.

show abstract

Section: Resultssupporting

confidence: 89%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

See 3 more Smart Citations

The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany

Christl

Poli

Hufkens

et al. 2022

Int Tax Public Finance

Self Cite

View full text Add to dashboard Cite

show abstract

Arbeitsmarkteffekte der Corona-Krise — Sind Berufsgruppen mit niedrigen Einkommen besonders betroffen?

et al. 2021

View full text Add to dashboard Cite

How to Assess the Child Poverty and Distributional Impact of COVID-19 Using Household Budget Surveys: An Application Using Turkish Data

Aran¹,

Aktakke²,

Kibar³

et al. 2021

Eur J Dev Res

View full text Add to dashboard Cite

This study presents a methodology to predict the child poverty impact of COVID-19 that can be readily applied in other country contexts where similar household data are available—and illustrates this case using data from Turkey. Using Household Budget Survey 2018, the microsimulation model estimates the impact of labour income loss on household expenditures, considering that some types of jobs/sectors may be more vulnerable than others to the COVID-19 shock. Labour income loss is estimated to lead to reductions in monthly household expenditure using an income elasticity model, and expenditure-based child poverty is found to increase in Turkey by 4.9–9.3 percentage points (depending on shock severity) from a base level of 15.4%. Among the hypothetical cash transfer scenarios considered, the universal child grant for 0–17 years old children was found to have the highest child poverty reduction impact overall, while schemes targeting the bottom 20–30% of households are more cost-effective in terms of poverty reduction. The microsimulation model set out in this paper can be readily replicated in countries where similar Household Budget Surveys are available.

show abstract

Distributional Effects of Macroeconomic Shocks in Real-Time: A Novel Method Applied to the COVID-19 Crisis in Germany

Cited by 4 publications

References 17 publications

The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany

The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany

Arbeitsmarkteffekte der Corona-Krise — Sind Berufsgruppen mit niedrigen Einkommen besonders betroffen?

How to Assess the Child Poverty and Distributional Impact of COVID-19 Using Household Budget Surveys: An Application Using Turkish Data

Contact Info

Product

Resources

About