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Görtz, C., McGowan, D. and Yeromonahos, M. (2023) Furlough and household financial distress during the COVID-19 pandemic. Oxford Bulletin of Economics and Statistics, 85 (6). pp. 1157-1184. ISSN 0305-9049
Abstract
We study how being furloughed affects household financial distress during the COVID-19 pandemic in the United Kingdom. Furlough increases the probability of late housing and bill payments by 30% and 19%, respectively. At the aggregate level, furlough increases the incidence of financial distress by 3.38 percentage points. To offset furlough-induced income reductions, individuals significantly reduce consumption and spend savings. Relative to unemployment, the potential alternative in the absence of a furlough scheme, furlough reduces the incidence of financial distress by 95%. Estimates show an 80% government contribution to furloughed workers' wages minimizes the incidence of financial distress at the lowest cost to taxpayers.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2023 The Authors. Oxford Bulletin of Economics and Statistics published by Oxford University and John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution License, (http://creativecommons.org/licenses/by/4.0/) which permits use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Furlough; short-time work; COVID-19; financial distress; automatic stabilizers; inequality |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 21 Apr 2023 11:07 |
Last Modified: | 09 Oct 2024 16:02 |
Status: | Published |
Publisher: | Wiley |
Refereed: | Yes |
Identification Number: | 10.1111/obes.12556 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:198440 |
Available Versions of this Item
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Furlough and household financial distress during the Covid-19 pandemic. (deposited 21 Apr 2023 11:19)
- Furlough and household financial distress during the COVID-19 pandemic. (deposited 21 Apr 2023 11:07) [Currently Displayed]