Ecuador’s social protection system failed during the pandemic. It needs a rethink

Household incomes in Ecuador were badly hit by the pandemic, despite the government’s emergency grant to families. H Xavier Jara Tamayo (University of Essex), Lourdes Montesdeoca (Facultad Latinoamericana de Ciencias Sociales, Ecuador) and Iva Tasseva (LSE) say the country needs to rethink its social protection plans and consider raising more money through corporate and wealth taxes

The impact of the COVID-19 pandemic on poverty and inequality in Mexico

The objective is to quantify the effect of the COVID-19 pandemic on employment, poverty and inequality in Mexico. The methodology is based on a probit model to identify individuals at risk of employment loss, whose earnings are set to zero in ENIGH 2018 to match changes in employment and earnings observed in between December 2019 and the May 2020 according to ENOE and ETOE surveys, respectively. MEXMOD, Mexico’s microsimulation model, is used to simulate tax-benefit policies based on the pre-COVID and COVID-scenarios. The results show that there was a loss of 12.1 million jobs. Poverty reached 60.16% and extreme poverty reached 29.73%; inequality grew 8.2%. It is recommended to strengthen social policy with extra funding (taxing the rich) to achieve greater redistribution. The limitation is that income distribution is held constant as we do not have ENIGH 2020. The originality is to offer timely measures of poverty and inequality using microsimulation techniques to overcome the lack of data during the pandemic. The research concludes that there are not automatic stabilizers to cope COVID-19 negative effects and cash-transfers are not sufficient to do so.El impacto de la pandemia del COVID-19 en la pobreza y desigualdad en MéxicoObjetivo: medir el efecto de la pandemia COVID-19 en el empleo, la pobreza y la desigualdad en México. Metodología: se emplea un modelo probit para identificar a las personas en riesgo de perder el empleo, cuyos ingresos se establecen en cero en la ENIGH 2018 para coincidir con los cambios en el empleo y los ingresos observados entre diciembre de 2019 y mayo de 2020 según las encuestas ENOE y ETOE, respectivamente. MEXMOD, el modelo de microsimulación de México, se utiliza para simular las políticas de impuestos y transferencias basadas en los escenarios pre-COVID y COVID. Resultados: una pérdida de 12.1 millones de empleos, la pobreza llegó al 60.16%, la pobreza extrema al 29.73% y la desigualdad creció un 8.2%. Recomiendaciones: fortalecer la política social con mayor recaudación (gravando a los ricos) para una mayor redistribución. Limitación: la distribución del ingreso se mantiene constante al no contar con la ENIGH 2020. Originalidad: se ofrece medidas oportunas de pobreza y desigualdad utilizando técnicas de microsimulación para superar la falta de datos durante la pandemia. Conclusión: no existen estabilizadores automáticos para combatir los efectos negativos de COVID-19

Beyond averages - Fairness in an economy that works for people

Growing disparities on multiple socio-economic dimensions have contributed to a sense of unfairness and discontent in Europe. Fairness is a subjective phenomenon, but the far-reaching consequences of perceptions of unfairness warrant a closer look at its drivers and underlying dynamics. The report, written before the outbreak of the COVID-19 pandemic, analyses some of the most pertinent dimensions of fairness in relation to the agenda for a fair, inclusive and social European Union. Income inequality, educational inequality and the challenges facing existing welfare state arrangements are discussed from a pre-crisis perspective. Thus, the report gives a snapshot of the state of fairness in Europe before the COVID-19 outbreak and provides a benchmark against which some of the consequences of the current situation can be evaluated.JRC.I.1-Monitoring, Indicators & Impact Evaluatio