Estimating COVID-19 earnings losses in Europe

In this INET working paper, Senior Research Fellow Brian Nolan and his co-authors estimate the earnings losses of households in the Euro Area thanks to the labour shock of the COVID-19 pandemic.

They find that affected households could only offset half their losses by relying on existing liquid assets (ranging from 25% to 80% across countries). The savings buffers of households in the bottom fifth of earnings was also insufficient to prevent them from falling into lower earnings.

(Sarah Kuypers, Ive Marx, Brian Nolan, and Juan C Palomino, 'Lockdown, Earnings Losses and Household Asset Buffers in Europe'. Published as an INET Oxford Working Paper No. 2021-10.)