NATSEM Seminar Series

The Impact of Covid-19 and Policy Response on Australian Income Distribution and Poverty

Wed 23 September 2020Prof. Jinjing Li, National Centre for Social and Economic Modelling, University of Canberra / 11:00am-12:00pm

Venue: Now available on YouTube

The National Centre for Social and Economic Modelling has applied the latest economic simulation methods to conduct the first near real time estimate of changes in Australian household income distribution due to COVID19.

The good news is that there has been a reduction in income inequality in Australia. The caveat within NATSEM’s findings is that they are temporary and linked to federal government policy.

This presentation will outline these findings and new methods for public sector, non-government and academic audiences. This event is free to attend. You are welcome to forward this invitation to any interested guests.

ABOUT THE TALK

The presentation will discuss results from a near real-time analysis of the income distribution effects of the COVID-19 crisis in Australia to understand the ongoing changes in the income distribution as well as the impact of policy responses. By semi-parametrically combining incomplete observed data from three different sources (namely, the Monthly Longitudinal Labour Force Survey, the Survey of Income and Housing and the administrative payroll data), we estimate the impact of COVID-19 and the associated policy responses on Australian income distribution between February and June 2020 (covering the immediate periods before and after the initial outbreak). Our results suggest that despite the growth in unemployment, the Gini of the equalised disposable income inequality has dropped by nearly 0.03 point since February. The reduction is because of the additional wage subsidies and welfare supports offered as part of the policy response, offsetting a potential surge in income inequality. Additionally, the poverty rate, which could have been doubled in the absence of the government response, also reduced by 3 to 4 percentage points. The result shows the effectiveness of temporary policy measures in maintaining both the living standards and the level of income inequality. However, the heavy reliance on the support measures raises the possibility that the changes in the income distribution may be reversed and even substantially worsened off should the measures be withdrawn. 

ABOUT THE SPEAKER

Jinjing Li is a Professor at NATSEM, University of Canberra. He is an internationally recognised expert in microsimulation modelling and serves as a board member of the International Microsimulation Association (IMA). Prof Li has led and developed a range of policy simulation models since joining NATSEM and contributed to projects which generated over two million dollars of external funding. The STINMOD+ tax microsimulation model which he designed, is used or referred to by a range of government agencies, NGOs, consulting groups and the general public in Australia. In 2018, Prof Li was invited to give evidence at a Senate Committee Inquiry into the Treasury Laws Amendment for his expertise in tax simulation modelling. Internationally, Prof Li has been invited to consult on and contribute to various microsimulation projects worldwide for international organisations, government agencies, NGOs, and think tanks.

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