scholarly journals The initial impact of COVID-19 and policy responses on household incomes

2020 ◽  
Vol 36 (Supplement_1) ◽  
pp. S187-S199 ◽  
Author(s):  
Mike Brewer ◽  
Laura Gardiner

Abstract As soon as the scale of the coronavirus shock to the economy became clear, the UK government introduced three policies to protect directly household incomes: a Job Retention Scheme, to pay the wages of employees who were temporarily furloughed; a Self-Employment Income Support Scheme, to give grants to established self-employed people whose businesses had been affected; and a package of increases to entitlements to social security benefits, with Universal Credit at the core, that bolstered the UK’s means-tested ‘safety net’. This paper analyses the design and beneficiaries of these policies and, given the distributional pattern of the labour market shock, considers the emerging overall impact on living standards, particularly of low-income households.

2017 ◽  
Vol 38 (2) ◽  
pp. 367-386 ◽  
Author(s):  
Donald Hirsch

The success of the contemporary ‘living wage’ movement has been highlighted by the UK government’s decision to increase the statutory minimum wage for over-25s sharply, in the name of improving living standards. This breaks with neoliberal reluctance to intervene in labour markets, yet raises difficult issues centring around whether minimum hourly pay rates are suited to promoting adequate household incomes. At worst, ‘living wages’ could distract from other policies with this objective. This article acknowledges recent critiques of the living wage as an anti-poverty measure, but demonstrates that, in combination with other policies, wage floors can play a crucial role. It shows that low pay and inadequate working incomes overlap substantially. The article argues that governments promising that work will deliver adequate living standards need a clearer narrative in which pay, public transfers/subsidies and sufficient levels of employment combine to deliver minimum acceptable living standards for working families.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kerrie Sadiq ◽  
Richard Krever

Purpose Tax policymakers are currently navigating a path through a delicate dialectic of macro- and micro-level policy responses to the economic dislocation of the COVID-19 pandemic. The purpose of this paper is to examine initial tax measures that are aimed at helping taxpayers needing liquidity, solvency and income support. Design/methodology/approach This study undertakes a review of key tax policy responses of six jurisdictions across the globe that have similar tax regimes and virus mitigation strategies (albeit with different outcomes). Key initiatives implemented from February to April 2020 by Australia, Canada, New Zealand, Singapore, South Africa and the UK are examined. Findings This study indicates that tax concessions are a crude and mostly ineffective way of assisting individuals and enterprises in difficulty. In the longer term, if the crisis prompts desirable reforms such as extending the recognition of tax losses, the income tax system will emerge fairer and more efficient. Practical implications An investigation of the short-term reforms announced relating to asset write-offs, tax deferral, tax losses and goods and services tax/value-added tax rates in light of the liquidity, income support and stimulus objectives shows that in some cases the policies may have been misguided. The findings can be used by policymakers as the basis for designing better targeted alternative non-tax responses. Originality/value Jurisdictional responses to tax policy reforms during a modern period of significant economic dislocation have yet to be documented in the literature. Specifically, this paper highlights the limitations of tax policy initiatives as a response to financial hardship.


2018 ◽  
Vol 18 (3) ◽  
pp. 450-472 ◽  
Author(s):  
JONATHAN CRIBB ◽  
CARL EMMERSON

AbstractWe estimate the impact of increasing the female early retirement age (ERA) on household living standards. Examining the increase in the female ERA from 60 to 63 in the UK, we find increased earnings only partially offset lost public pension income, leaving affected women's household incomes £32 per week lower on average. The proportional effect was substantially larger for women in lower income households. This increased the income poverty rate among affected women by 6.4 percentage points. We find no evidence of an increased inability to afford important material items, potentially suggesting that material deprivation has been avoided through smoothing of consumption.


2003 ◽  
Vol 186 ◽  
pp. 85-97
Author(s):  
Ray Barrell ◽  
Simon Kirby ◽  
Rebecca Riley ◽  
Desirée van Welsum

We construct a framework for evaluating the macroeconomic impact on the UK economy of policies that are aimed at reducing the number of people receiving social security benefits by helping them into employment. By means of model simulation we evaluate the gains to the economy in terms of output, employment and improvements to the public finances of a policy that reduces the number of people claiming disability benefits or lone parents on Income Support by 5 per cent. These gains can be regarded as significant and have to be offset against the costs of the policy. We conclude that it is possible to evaluate the impact of policies to enable benefit claimants to find work using a macroeconomic model, and that such an evaluation should be included in each assessment of policy change.


2015 ◽  
Vol 14 (3) ◽  
pp. 457-469 ◽  
Author(s):  
Patricia J Lucas ◽  
Tricia Jessiman ◽  
Ailsa Cameron

The Healthy Start scheme provides food welfare to pregnant women and children under four years old in the UK. The Government provides vouchers to families living on a low income that can be exchanged for infant formula, plain cow's milk and fresh or frozen fruit and vegetables. This article reports on a qualitative study of parents using Healthy Start in England. Interviews were conducted with 107 parents from thirteen areas in England. Most found the scheme easy to use, but some vulnerable groups were unable to access the scheme. The vouchers provided a vital source of food at times of crisis, and put purchase of fruit and vegetables within reach for some. Parents reduced stigma by using self-service tills and by only visiting retailers known to accept the vouchers. Healthy Start provides additional protection by sitting outside of other social security benefits. To continue to provide this essential protection, their value should be reviewed and increased.


Demography ◽  
2018 ◽  
Vol 55 (1) ◽  
pp. 189-221 ◽  
Author(s):  
Bradley Hardy ◽  
Timothy Smeeding ◽  
James P. Ziliak

2020 ◽  
Vol 2 ◽  
pp. 11 ◽  
Author(s):  
Madeleine Power ◽  
Bob Doherty ◽  
Katie Pybus ◽  
Kate Pickett

This article draws upon our perspective as academic-practitioners working in the fields of food insecurity, food systems, and inequality to comment, in the early stages of the pandemic and associated lockdown, on the empirical and ethical implications of COVID-19 for socio-economic inequalities in access to food in the UK. The COVID-19 pandemic has sharpened the profound insecurity of large segments of the UK population, an insecurity itself the product of a decade of ‘austerity’ policies. Increased unemployment, reduced hours, and enforced self-isolation for multiple vulnerable groups is likely to lead to an increase in UK food insecurity, exacerbating diet-related health inequalities. The social and economic crisis associated with the pandemic has exposed the fragility of the system of food charity which, at present, is a key response to growing poverty. A vulnerable food system, with just-in-time supply chains, has been challenged by stockpiling. Resultant food supply issues at food banks, alongside rapidly increasing demand and reduced volunteer numbers, has undermined many food charities, especially independent food banks. In the light of this analysis, we make a series of recommendations. We call for an immediate end to the five week wait for Universal Credit and cash grants for low income households. We ask central and local government to recognise that many food aid providers are already at capacity and unable to adopt additional responsibilities. The government’s - significant - response to the economic crisis associated with COVID-19 has underscored a key principle: it is the government’s responsibility to protect population health, to guarantee household incomes, and to safeguard the economy. Millions of households were in poverty before the pandemic, and millions more will be so unless the government continues to protect household incomes through policy change.


Author(s):  
Mike Brewer ◽  
Iva Valentinova Tasseva

AbstractWe analyse the UK policy response to Covid-19 and its impact on household incomes in the UK in April and May 2020, using microsimulation methods. We estimate that households lost a substantial share of their net income of 6.9% on average. But policies protected household incomes to a substantial degree: compared to the drop in net income, GDP per capita fell by 18.9% between the first and second quarter of 2020. Earnings subsidies (the Coronavirus Job Retention Scheme) protected household finances and provided the main insurance mechanism during the crisis. Besides subsidies, Covid-related increases to state benefits, as well as the automatic stabilisers in the tax and benefit system, played an important role in mitigating the income losses. However, analysing the impact of a near-decade of austerity on the UK safety net, we find that, compared to 2011 policies, the 2020 pre-Covid tax-benefit policies would have been less effective in insuring incomes against the shocks. We also assess the potential distributional impact of introducing a Universal Basic Income (UBI) instead of the Covid emergency measures and find that a UBI would have supported the incomes of different vulnerable groups but would have provided less protection to those hit hardest by the labour market shocks.


Author(s):  
Andy Jolly

The ‘Air Jamaica generation’ of migrants to the UK over the past 30 years has received less political and scholarly attention than the so-called Windrush generation. Children of this generation are often invisible in social policy discussions because they lack the legal right to paid employment, and are subject to the no recourse to public funds (NRPF) rule. This excludes them from accessing welfare provision, including most social security benefits, council housing and homelessness assistance. This chapter examines support under section 17 of the Children Act 1989, one of the few welfare entitlements which children and families with NRPF retain, arguing that, without access to mainstream social security, section 17 is an inadequate safety net to prevent poverty. The chapter concludes that this is rooted in discriminatory legislation and policy, resulting in situations which, while structural in cause, would be viewed as neglectful if perpetrated by a parent or carer.


Author(s):  
Eldin Fahmy

Eldin Fahmy examines the nature, extent and social distribution of youth deprivation and social exclusion amongst 16-29 year olds living in Britain. He explores our understanding of youth marginality and disadvantage, through supplement income data with direct measures of deprivation of living standards and exclusion from customary norms. There is a focus on the social profile of vulnerability amongst young people, beyond relative low-income measures. He compares data for 1990, 1999 and 2012 to explore young people’s vulnerability and disadvantage in the context of youth transitions and disadvantage.


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