Poverty in Times of Crisis: Evidence from the Covid-19 Pandemic using Administrative Data in Switzerland
Creators: name: Hümbelin, Oliver
name: Strazzeri, Maurizio
name: Sutter, Rulla
name: Hobi, Lukas Christian
name: Lehmann, Olivier Tim
name: Farys, Rudolf
Publisher: name: (:unav)
Year: 2024

description: The COVID-19 pandemic, initially a health crisis, has far-reaching and varied economic consequences. With the possibility of future global pandemics, it is crucial to understand the economic dynamics during such crises. This study delves into the uneven economic impacts of the pandemic on different population groups, revealing that while some individuals experienced minimal disruption or even benefitted, others endured significant income losses. This necessitates a comprehensive examination of poverty and the efficacy of social security measures. Early studies in Switzerland concentrated on the pandemic's initial stages, highlighting the need for a systematic analysis of longer-term economic dynamics due to the limited availability of comprehensive data. This study aims to bridge this gap by evaluating how the pandemic influenced inequality, poverty, and the effectiveness of the social security net in Switzerland. Our theoretical model, inspired by Crettaz and Lohmann, offers a framework to comprehend the poverty effects of the pandemic. This model illustrates the interconnection between a household's financial resources, economic conditions, and social security structures. Economic stability relies on a robust social security system, which in turn depends on a healthy economy. The socio-economic landscape, including demographic factors, technological advancements, globalization, values, norms, and legal/governmental regulations, further shapes these interactions. This study focuses on examining the COVID-19 crisis as an economic shock, evaluating responses within economic and social security systems, and assessing the implications for poverty risks at the individual level. A critical component of the model is the individual's situation and social position, which determine the extent of impact during a crisis. The core dataset for this study comprises tax data from five Swiss cantons from 2019 to 2022, offering detailed insights into income, wealth, and social security benefits. It incorporates special COVID-19 measures, including a unique income replacement statistic. Additional data sources include emergency payments by Suisse culture social for cultural professionals, STATPOP/housing register for household composition and financial situation, and a structural survey for economic branches, professions, and education. To assess income and wealth inequality from 2019 to 2022, macro-indicators such as the Gini coefficient and absolute and adjusted poverty measures are employed. To explore the short- and mid-term impacts at the household level, indicators for socioeconomic position and educational attainment from 2019 are constructed, and income and wealth trajectories are analyzed for 2020, 2021, and 2022. The study evaluates the effectiveness of the social security net by comparing poverty rates before and after the implementation of social benefits, with a specific focus on COVID-19 special measures. Targeted analyses of at-risk groups provide a nuanced understanding of how different segments of the population are affected by socio-economic changes and social security interventions. Data collection is expected to conclude by the end of 2023, with preliminary results to be presented at a conference in May 2024. This comprehensive analysis aims to deepen our understanding of the COVID-19 pandemic's economic impact on poverty and social security in Switzerland. The insights gained are intended to inform better crisis management strategies and enhance social security measures for vulnerable groups, ensuring more effective support during future economic shocks.