Left Behind in COVID-19 Times

Abstract

The chapter analyses the effects of income support measures implemented during the first year of the COVID-19 pandemic on poverty and income inequality in Serbia and proposes more efficient alternatives. Results indicate a decrease in poverty and inequality in 2020, compared to 2019, with much of the observed reduction due to the universal cash transfer to the adult population (UCT). However, UCT had high expenditures and contributed to the between-group inequalities increase. The second main measure: transfer to pensioners and social assistance recipients was poorly targeted, as pensioners had below-average poverty rates before the pandemic. Children and the unemployed, who had the highest pre-pandemic poverty rates, were not targeted by specific support measures. In the case of future extreme events, when formulating income support measures, the government should consider pre-crisis differences in income distribution and assess the impact of the crisis on different groups.