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The cushioning effect of fiscal policy in the EU during the COVID-19 pandemic


Identifikacijski podaci
JRC nr: JRC125567
Datum objave
22. srpnja 2021.


This paper analyses the extent to which the tax-benefit systems of the EU Member States have protected household incomes during the COVID-19 pandemic. We makes use of EUROMOD, the EU tax-benefit microsimulation model based on 2018 EU-SILC data. Detailed aggregate labour market statistics combined with a novel approach to simulate transitions from work into monetary compensation schemes (short-time work schemes, as well as compensation schemes for self-employed) and into unemployment allows us to replicate the labour market conditions during the COVID-19 crisis in 2020 in the underlying EU-SILC data. Our analysis highlights that most of the countries analysed experienced a significant drop in market incomes, with poorer households hit the hardest. However, our findings also suggest that the tax-benefit systems of the EU Member States have been able to absorb a significant share of the COVID-19 shock, offsetting – or alleviating – its regressive nature on market incomes. Monetary compensation schemes implemented by EU Member States played a key role in cushioning against the fall in household income during the crisis.


CHRISTL Michael, DE POLI Silvia, FIGARI Francesco, HUFKENS Tine, LEVENTI Chrysa, PAPINI Andrea, TUMINO Alberto


2. VELJAČE 2022.
(1.89 MB - PDF)