The Idiosyncratic Impact of an Aggregate Shock: The Distributional Consequences of COVID-19

Abstract

Using new data from the Understanding Society: COVID 19 survey collected in April 2020, we show how the aggregate shock caused by the pandemic affects individuals across the distribution. The survey collects data from existing members of the Understanding Society panel survey who have been followed for up to 10 years. Understanding society is based on probability samples and the Understanding Society Covid19 Survey is carefully constructed to support valid population inferences. Further the panel allows comparisons with a pre-pandemic baseline. We document how the shock of the pandemic translates into different economic shocks for different types of worker: those with less education and precarious employment face the biggest economic shocks. Some of those affected are able to mitigate the impact of the economic shocks: universal credit protects those in the bottom quintile, for example. We estimate the prevalence of the different measures individuals and households take to mitigate the shocks. We show that the opportunities for mitigation are most limited for those most in need.

The mental health impact of COVID-19 and lockdown-related stressors among adults in the UK

“…The multilevel models included inverse probability weights to take account of unequal selection probabilities into the study and differential nonresponse at each wave, including to the COIVD-19 monthly surveys. These weights ensure the results are reliable estimates and representative of the UK adult population living in private households using predictors that include basic demographics, household composition, economic variables and health variables, survey design variables and survey para data (Benzeval, Michaela et al, 2020). The weights correct both for attrition from Understanding Society between wave 9 and relevant web survey wave, and nonresponse to that web survey (Institute for Social and Economic Research, 2020).…”

Locked down leisure in Britain

“…The bottom fifth in terms of income were already relying on state pensions or Universal Credit, so could suffer little further damage. Those in the middle were the most vulnerable, and among them single parents, the least educated, and Black, Asian and other minority ethnic (BAME) groups (Benzeval et al, 2020).…”

“…Their presence in the leisure industries explains why the bottom decile of earners was the most vulnerable during the lockdown. Thirty-four per cent compared with just 5% in the top-earning decile were employed in businesses that closed (Benzeval et al, 2020). The most vulnerable were from just above the bottom fifth in terms of household income who were normally dependent on state welfare or wage top-ups from Universal Credit.…”

Mental Health Before and During the COVID-19 Pandemic: A Longitudinal Probability Sample Survey of the UK Population

“…7 However, change in mental health during the public health emergency may not be evenly distributed across the population. 8 Effects specific to lockdown include acute financial strain (low income, unemployment) and household dynamics (domestic violence, living alone or with young children not attending nursery or school), 9 as well as exposures like having an underlying mental or physical health condition or being a keyworker exposed to potential infection. 10 For some people, with high levels of socioeconomic security, the suspension of commuting, changes to education and work activities, and increased time with family potentially could have reduced stress and increased mental health and wellbeing.…”