Asset Publisher

Article

Wage inequality during the pandemic: largely contained by public subsidies

Oriol Aspachs, Alberto Graziano and Josep Mestres, CaixaBank Research; Rubén Durante, José García-Montalvo and Marta Reynal-Querol, Universitat Pompeu Fabra
Project selected in the Social Research Call 2020 (LCF/PR/SR20/52550010)

The crisis generated by covid-19 has brought in its wake considerable economic consequences, including a significant impact on wage inequality. This inequality not only responds to the dispersion in wage levels, but also to employment “intensity”, i.e. whether people are working and with what regularity. The use of mass data in real time enables analysis of the role that has been played by public subsidies to mitigate the impact of the crisis on inequality, both for the population as a whole and for the different population groups. It was observed that income support mechanisms implemented by government have managed to substantially reduce this impact, and that the time devoted to managing these subsidies is also important.
Key points
  • 1
       During the first months of the pandemic, the impact of covid-19 on inequality, before public subsidies are accounted for, was enormous. In April 2020, unemployment inequality as measured by the Gini index had increased by over 11 points. However, after considering public subsidies – particularly, the ERTE furlough scheme – this increase was reduced to 4 points.
  • 2
       The results show that in order to reduce inequality, having a good system of public subsidies is not sufficient: the efficiency with which they are managed is also key. For example, if in November 2020 the processing of unemployment subsidies had been 5% faster in terms of in number of days, the Gini index would have been reduced by 0.2 points.
  • 3
       The impact of covid-19 on inequality was greater among women, young people, and people born abroad.
  • 4
       In Spain, employment is the most important component in the changes in inequality and, once more, it was the main factor during the covid-19 crisis. For illustrative purposes, between February and April 2020, nearly 90% of the increase in salary inequality (before public transfers) obeyed the decline in employment; the rest was due to increases in wage inequality among workers.
DesigualdadSalarialDuranteLaPandemiaEN_1.png

Classification

Tags

Subject areas

Related content

Article

Inequality of carbon emissions across income and age in Spain

The top 1% of carbon emitters have a carbon footprint that is 7 times higher than the average.

Article

Suicide-related calls to 112

According to a study conducted in Valencia, suicide calls to 112 increased during the period 2017-2022.

Article

Mental health in Catalonia one year into the covid-19 pandemic

What did the pandemic mean for mental health? Over 25% of participants presented symptoms of moderate or severe depression.  

Article

Adversities related to well-being during the pandemic

Did the pandemic affect everyone equally? On a financial level, it had a greater impact on those with lower levels of education and income.

Article

Telework after the Pandemic

Does men’s involvement in household chores increase when they work from home?

You may also find interesting

Young people, opportunities, and futures

Dossier

Young people, opportunities, and futures


Social Inclusion

What challenges are faced by young people in Spain and Portugal? In the Social Observatory’s twelfth Dossier, we analyse it.

Interview Robert Pogue Harrison

Interview

Interview Robert Pogue Harrison


Social Inclusion

Robert Pogue Harrison examines the concept of youth from the perspective of philosophy and cultural studies. How do we define it?

Temporary employment rate young workers

Article

Temporary employment rate young workers


Social Inclusion

The reduction in the casualisation of young people since the labour reforms is very evident in Spain and almost imperceptible in Portugal. Why?