Abstract

The COVID-19 pandemic affected different aspects of living conditions such as income, health, mental health, well-being, education, and work. During the pandemic, depending on the national provisions, people had limited possibilities to access public places and services. Many daily facilities were replaced by online alternatives. Some businesses experienced standstill situations, in particular those related to tourism, recreation and gastronomy, thus affecting to employees in those sectors. The household income from employment was replaced by temporary governmental support in many countries, which varied in terms of level and target among countries. Most of the support was addressed to people on the lower and middle part of income distribution. However, the least socially protected population (such as economically inactive persons or those with undeclared jobs) might not have fully benefited from government funding, so they have been heavily bearing the impact of COVID-19. Not only income was affected by the pandemic but also consumption patterns. In 2022, the Russian war of aggression against Ukraine, the spike of energy prices, and the level of inflation might have affected different population groups at varying degrees. For example, high food inflation has the largest impact on the lowest income quintiles while, high-energy prices affect all the income groups although the severity could differ. Technical difficulties have also arisen in household surveys to correctly measure the phenomena, resulting often in ad hoc solutions.
The findings presented in this work show the most recent income trends in the European Union, analysing data from two data sources, namely from the European Union Statistics on Income and Living Conditions (EU-SILC), and from the Quarterly data collection on living conditions (QLC).
EU-SILC data shows that the majority of the European population had a stable income and no significant negative changes in their household income were recorded when comparing 2020 and 2021 (84.0% of the EU population lived in a household whose net income either remained stable (66.5%) or increased (17.5%)). Financial support from COVID-19 related schemes, defined as public transfers to households or household members (e.g.: housing or unemployment allowances), played an important role in relieving negative effects in some of the EU Member States.
In addition, the positive consequences of social transfers aiming at reducing inequalities are observed when comparing Gini coefficients before and after social transfers. In 2021, the Gini coefficient for median equivalised disposable income before social transfers was 52.2% in the EU, while it decreased to 30.1% after social transfers.
The analysis of quarterly data (QLC) shows that in 2022 household income remained stable during the 12 month period preceding the interview, however, there was an increase in the reported level of difficulties to make ends meet. In Q2 of 2022, the larger number of respondents declared having a stable/increase level of income while also reporting difficulties to make ends meet, as compared to previous quarters. This could be the effect of the increase in prices since the beginning of 2022.