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Earnings Losses and the Role of the Welfare State During the COVID-19 Pandemic: Evidence from Sweden

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  • Adermon, Adrian

    (Institute for Evaluation of Labour Market and Education Policy (IFAU))

  • Laun, Lisa

    (Institute for Evaluation of Labour Market and Education Policy (IFAU))

  • Lind, Patrik

    (Institute for Evaluation of Labour Market and Education Policy (IFAU))

  • Olsson, Martin

    (Research Institute of Industrial Economics (IFN))

  • Sauermann, Jan

    (Institute for Evaluation of Labour Market and Education Policy (IFAU))

  • Sjögren, Anna

    (Institute for Evaluation of Labour Market and Education Policy (IFAU))

Abstract

Many governments introduced temporary adjustments to counter the economic and health consequences of the COVID-19 pandemic. We study the importance of already existing government transfers and pandemic measures to mitigate individual income losses during the pandemic in Sweden using a difference-in-differences approach and population-wide data on monthly earnings and government transfer payments. We find that labor earnings dropped by 2.7 percent in 2020. Existing transfers and pandemic measures reduced earnings losses to 1.5 percent. These average effects mask considerable differences in income losses, which were, by and large, evened out by existing transfers and pandemic measures.

Suggested Citation

  • 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 1443, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1443
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    Cited by:

    1. Buhmann, Mara & Pohlan, Laura & Duncan, Roth, 2023. "The Covid-19 Pandemic and Transitions out of Unemployment," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277678, Verein für Socialpolitik / German Economic Association.
    2. Nikolay Angelov & Daniel Waldenström, 2023. "The Economic Effects of Covid-19 in Sweden: A Report on Income, Taxes, Distribution, and Government Support Policies," CESifo Working Paper Series 10547, CESifo.

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    More about this item

    Keywords

    COVID-19; Income inequality; Government transfers; Short-time work;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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