Income and employment losses during the COVID-19 pandemic and the financial situation of households: evidence from the EFF

Abstract

Rationale Drawing on the Spanish Survey of Household Finances (EFF), this article analyses the relationship between the losses of employment or reductions in labour income caused by COVID-19 and the Spanish population’s financial position, uncertainty and life satisfaction. Takeaways • Between 2019 and end-2020, uneven declines in labour income were observed among individuals affected by job retention schemes, lay-offs or business closures, although public assistance mitigated the most pronounced falls. • Between 2017 and 2020, the relative fall in spending on non-durable goods was 6-10 percentage points higher among those affected by such circumstances, reflecting broad-based increases in uncertainty about their future income. • Compared with the unaffected group, levels of indebtedness rose most markedly, and increases in net wealth were most subdued, among those who experienced more protracted job or income losses.