Policy response significantly supports incomes from COVID-19 job losses
The measures announced by Government will significantly cushion incomes from COVID-19 related job losses, according to a new study published today by the Economic and Social Research Institute (ESRI).
The research simulates the impact that large numbers of job losses will have on families’ incomes, with and without the additional measures announced by the government. It finds that the flat-rate Pandemic Unemployment Payment (PUP) of €350 per week does most to support incomes, reducing the number who lose more than 20% of their disposable income by around a third (from 400,000 to 281,000 in our ‘medium’ unemployment scenario of 600,000 job losses).
Barra Roantree, an author of the report and an economist at the ESRI, said:
“The government’s policy response will significantly reduce the number of families who see extreme reductions in their income as a result of job losses related to the ongoing COVID-19 pandemic. However, the rise in unemployment will bring significant costs to the exchequer: around €800 million per quarter for every 100,000 individuals who lose their job.”
The research also finds that the additional cost of the government’s Temporary Wage Subsidy Scheme may be minimal, in part because its current design is less generous to lower earners than the Pandemic Unemployment Payment they would receive if laid off by their employer.
Karina Doorley, an economist at the ESRI and another author of the report said:
“A central aim of the Temporary Wage Subsidy Scheme is for companies to retain links with their employees so they can resume activity faster once necessary public health measures have been relaxed. Ensuring that both employees and employers have an incentive to take up this payment is important to ensuring it achieves this objective.”
A webinar, which discussed the findings of the report, took place on 9 April 2020. You can view the video below.