Oriol Aspachs, Ruben Durante, José García-Montalvo, Alberto Graziano, Josep Mestres, Marta Reynal-Querol, 22 September 2020

The economic crisis from the COVID-19 pandemic may disproportionately affect the most vulnerable segments of the population, creating serious challenges for social cohesion and political stability. This column constructs a high-frequency measure of income inequality using anonymised data from bank records on the wages and public transfers of over three million account holders in Spain. Wage inequality increased by almost 30% during the COVID-19 crisis, mainly due to job losses and wage cuts for low-income workers. However, public transfers were very effective at offsetting most, though not all, of this increase.

CEPR Policy Research