Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1396: COVID-19 and Income Inequality: Evidence from Monthly Population Registers

Daniel Waldenström () and Nikolay Angelov ()
Additional contact information
Daniel Waldenström: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Nikolay Angelov: The Swedish Tax Agency and Uppsala Center for Fiscal Studies (UCFS)

Abstract: We measure the distributional impact of the COVID-19 pandemic using newly released population register data in Sweden. Monthly earnings inequality increased during the pandemic, and the key driver is income losses among low-paid individuals while middle- and high-income earners were almost unaffected. The pandemic had a larger negative impact on private-sector workers and on women. Using data on individual take-up of government COVID-19 support, we show that policy significantly dampened the inequality increase, but did not fully offset it. Annual total market income inequality, which also includes capital income and taxable transfers, shows similar patterns of increasing inequality during the pandemic.

Keywords: Pandemic; Income inequality; Earnings; Government policy

JEL-codes: D31; H12; H24; J22

36 pages, July 2, 2021

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