Too little but not too late. Nowcasting poverty and cash transfers' incidence in Uruguay during COVID-19's crisis
Resumen:
The economic crisis triggered by COVID-19 is causing a world-wide massive economic downturn, and what is likely to be the deepest GDP contraction for Latin America since the beginning of the XXth century. We microsimulate the short-run effect of the crisis on the poverty rate for the Uruguayan case based on household survey data, publicly available information on both cash-transfers and the increase in unemployed formal wage-earners applying for unemployment benefits, as well as macro-economic estimates of the likely GDP contraction. By combining these data sources, we are able to estimate the effect of the crisis on formal, informal and self-employed workers, while providing full micro-macro consistency to our results. We find that during the first full month of the lock-down, the poverty rate reaches 11.7%, an increase of over 36%. Moreover, new cash transfers implemented by the government have a positive but very limited effect in mitigating this poverty spike. We estimate that most of this increase in poverty could be neutralized with cash-transfers worth less than 0.5% of Uruguay’s annual GDP.
La crisis económica desencadenada por la COVID-19 está causando una recesión de grandes proporciones a escala mundial, y lo que probablemente sea la contracción más profunda del PIB para América Latina desde comienzos del siglo XX. En este artículo, microsimulamos el efecto de corto plazo de la crisis en la tasa de pobreza para el caso uruguayo en base a datos de encuestas de hogares, información disponible sobre transferencias monetarias y el incremento en las solicitudes de seguro de desempleo, así como estimaciones macro-económicas de la probable contracción del PIB. Al combinar estas fuentes de información, podemos estimar el efecto de la crisis en trabajadores formales, informales y cuentapropistas, al tiempo que aseguramos la consistencia micro y macro-económIca de nuestros resultados. Encontramos que durante el primer mes completo reducción de actividades, la tasa de pobreza alcanzó el 11.7%, un aumento de más de 36%. Las nuevas transferencias monetarias implementadas por el gobierno tienen un efecto positivo pero muy limitado para mitigar este pico de pobreza. Estimamos que la mayor parte de este incremento podría neutralizarse con transferencias monetarias por un valor inferior al 0,5% del PIB anual de Uruguay.
| 2020 | |
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COVID-19 Nowcasting Pobreza Microsimulaciones Países en desarrollo Uruguay Poverty Microsimulations Developing countries CRISIS ECONOMICA |
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| Inglés | |
| Universidad de la República | |
| COLIBRI | |
| https://hdl.handle.net/20.500.12008/24909 | |
| Acceso abierto | |
| Licencia Creative Commons Atribución - No Comercial - Sin Derivadas (CC - By-NC-ND 4.0) |
| Sumario: | The economic crisis triggered by COVID-19 is causing a world-wide massive economic downturn, and what is likely to be the deepest GDP contraction for Latin America since the beginning of the XXth century. We microsimulate the short-run effect of the crisis on the poverty rate for the Uruguayan case based on household survey data, publicly available information on both cash-transfers and the increase in unemployed formal wage-earners applying for unemployment benefits, as well as macro-economic estimates of the likely GDP contraction. By combining these data sources, we are able to estimate the effect of the crisis on formal, informal and self-employed workers, while providing full micro-macro consistency to our results. We find that during the first full month of the lock-down, the poverty rate reaches 11.7%, an increase of over 36%. Moreover, new cash transfers implemented by the government have a positive but very limited effect in mitigating this poverty spike. We estimate that most of this increase in poverty could be neutralized with cash-transfers worth less than 0.5% of Uruguay’s annual GDP. |
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