Our latest case study sets out how HM Treasury used data from Understanding Society’s Covid-19 Survey in its document, Impact of COVID-19 on working household incomes: distributional analysis as of May 2020, and again for its distributional analysis for the March 2021 Budget.
They compared employment status, and any change in take-home pay, in May 2020 compared with February, before lockdown. Using microsimulation modelling, the Treasury calculated that the government’s interventions were worth an average of around a fifth of incomes for working households, and reduced the scale of losses for working households by up to two-thirds.
Without government support, those in the lowest income decile would have lost about £100 per week, but the various schemes cancelled out this loss. There was even a slight increase in income for those in the lowest earning group.
This use of Understanding Society data formed part of a report which showed that during the coronavirus crisis, the UK suffered its biggest annual fall in output in 300 years – but that the labour market stayed surprisingly steady compared to previous recessions.
Covid 19EmploymentIncome and expenditureMoney and finances
