Template-type: ReDIF-Paper 1.0
Author-Name: Juan C. Palomino
Author-Workplace-Name: University of Oxford (UK), INET and Department of Social Policy and Intervention
Author-Name: Juan G. Rodríguez
Author-Workplace-Name: Universidad Complutense de Madrid (Spain), EQUALITAS, ICAE and CEDESOG
Author-Name: Raquel Sebastian
Author-Workplace-Name: Universidad Complutense de Madrid (Spain), EQUALITAS and ICAE
Title: Wage inequality and poverty effects of lockdown and social distancing in Europe
Abstract: Social distancing and lockdown measures taken to contain the spread of COVID-19
	may have distributional economic costs beyond the contraction of GDP. Here we
	evaluate the capacity of individuals to work under a lockdown based on a
	Lockdown Working Ability index which considers their teleworking capacity and
	whether their occupation is essential or closed. Our analysis reveals substantial and
	uneven potential wage losses across the distribution all around Europe and we
	consistently find that both poverty and wage inequality rise in all European
	countries. Under four different scenarios (2 months of lockdown and 2 months of
	lockdown plus 6 months of partial functioning of closed occupations at 80%, 70%
	and 60% of full capacity) we estimate for 29 European countries an average
	increase in the headcount poverty index that goes from 4.9 to 9.4 percentage points
	and a mean loss rate for poor workers between 10% and 16.2%. The average
	increase in the Gini coefficient ranges between 3.5% to 7.3% depending on the
	scenario considered. Decomposing overall wage inequality in Europe, we find that
	lockdown and social distance measures produce a double process of divergence:
	both inequality within and between countries increase.
Classification-JEL: D33, E24, J21, J31.
Keywords: Wage inequality; Teleworking; Social distancing; Europe; COVID.
Length: 43 pages 
Creation-Date: 2020-07
Number: 2020-03
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae2003.txt
File-URL: https://eprints.ucm.es/id/eprint/60824/1/2003.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:2003