The Impact of COVID-19 on Income of Vulnerable Groups

The study focuses on the heterogeneous impact of COVID-19 on income across different vulnerable groups, professional groups, regions and income groups, as well as identifying specific groups whose income is significantly affected by COVID-19. The study combined the Propensity Score Matching method with Difference-in-Differences models for linear and quantile regression in order to obtain average treatment effects and quantile treatment effects for different groups, based on the individual longitudinal data from the 28th and 29th rounds of the Russia Longitudinal Monitoring Survey - Higher School of Economics (RLMS-HSE). The findings indicated that individual incomes were negatively affected by COVID-19 for specific groups such as single parents, workers with lower education, unhealthy workers and so on. In addition, we found that individual income was disproportionately affected by COVID-19 for different income groups. For the overall sample, for those at the 10% / 25% / 50%, 75% and 90% income levels, their individual income fell by 11.3% / 5.13% / 4.11%, rose by 2.41% and fell by 5.83% respectively. Heterogeneity was also detected across regions and professional groups, in some income levels. Equivalent household income was even less significantly affected in this study, possibly because the heterogeneity that exists in household structure and individual characteristics of family members could not be captured by the study. However, the study has effectively examined the widespread heterogeneous effect of COVID-19 on income and identified those groups whose individual incomes are most affected, which will help the government to develop more targeted support measures.