The idiosyncratic impact of an aggregate shock: the distributional consequences of COVID-19

Document type
Working Paper
Author(s)
Benzeval, Michaela; Burton, Jon; Crossley, Thomas
Publisher
Institute for Fiscal Studies
Date of publication
4 June 2020
Series
IFS Working Paper; W20/15
Subject(s)
Social Policy, Employment, Poverty Alleviation Welfare Benefits and Financial Inclusion
Collection
Social welfare
Material type
Reports

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Using new data from the Understanding Society: COVID 19 survey collected in April 2020, this paper shows how the aggregate shock caused by the pandemic affects individuals across the distribution. The survey collects data from existing members of the Understanding Society panel survey who have been followed for up to 10 years. Understanding society is based on probability samples and the Understanding Society Covid19 Survey is carefully constructed to support valid population inferences. Further the panel allows comparisons with a pre-pandemic baseline. This paper documents how the shock of the pandemic translates into different economic shocks for different types of worker: those with less education and precarious employment face the biggest economic shocks. Some of those affected are able to mitigate the impact of the economic shocks: universal credit protects those in the bottom quintile, for example.

 

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