The heterogeneous impact of the COVID-19 pandemic on income: evidence from Russia

The study investigates the heterogeneity of the effect of COVID-19 pandemic-related restrictions on economic well-being in Russia based on labour market size, socio-demographic groups and income distribution. We examine the effect by composing a group of private-sector workers affected by pandemic-related restrictions in the labour market. We use public-sector workers as a counterfactual. Difference‑in‑differences, as the main approach, is combined with propensity score matching and applied to evaluate the average and quantile treatment effects. The results based on microdata from the RLMS-HSE reveal that the restrictions led to a loss of individual income of approximately 13%. However, the income decline was lower at the household level. In contrast to other crises, the pandemic led to significant income losses among working-age individuals, male workers and workers with secondary education. We note a negative effect on income in the top quantiles of the income distribution for the entire sample and in the median and lower quantiles for single-parent households and households with members who have severe health problems. The article contributes to the literature by identifying the heterogeneous effects of the pandemic restrictions in Russia and ruling out confounding factors.