The impact of COVID-19 on gender income inequality in the EU

Abstract

This study provides a comparative analysis of the gendered impacts of the pandemic and the related policy response on disposable incomes in the EU-27. The EU-wide microsimulation model EUROMOD was used to nowcast changes in the income distribution due to COVID-19 pandemic in 2020, and to decompose these changes into the effect of the labour market shock, automatic stabilizers and discretionary policy changes. To assess the impact of these changes on women and men, the study uses a gender sensitive measure of individual disposable income which accounts for intra-household income inequality. Our findings demonstrate that the total effect of the crisis and discretionary anti-COVID policy measures in 2020 on individual disposable incomes was positive and poverty reducing for both the working age and the older individuals. In most EU countries the 2020 labour market shock affected incomes of working age women to a smaller degree than men, while the effect of the discretionary policies implemented in 2020 was positive for both women and men in almost all EU countries. While men benefited more from the Monetary Compensation schemes, the impact of all COVID-19 related policies introduced in 2020 contributed to a reduction in the gender income gap among the working age population.