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.
TopLeft Behind In Covid Times: Systems Thinking Lessons For Income Support Measures In Pandemics
The COVID-19 pandemic highlighted the importance of systems thinking in addressing complex problems such as economic inequality. Systems thinking examines a phenomenon that involves examining its parts and the relationships between them rather than breaking the system down into parts and focusing on one part (Ramage & Shipp, 2009). As we move toward a post-pandemic world, systems thinking can help us build a more resilient and equitable society, for example, in the form of a holistic approach to health care (Butler, 2020), fair economic systems (Perugini & Vladisavljević, 2021), sustainable supply chains and adaptive infrastructures (Tsolakis et al., 2021), collaborative governance between and within countries, and more (Lin et al., 2021).
Systems thinking can help us design economic systems that prioritize sustainability and equity and are resilient in the face of shocks and disruptions. From this perspective, economic inequality is not just the result of individual actions but also a product of broader social, political, and economic systems. Lockdowns implemented to prevent contagion and the collapse of the healthcare systems have had severe consequences that disproportionately affect low-income people (Perugini & Vladisavljević, 2021). Systems thinking also suggests that the pandemic provided an opportunity to restructure our economic systems to make them more equitable and sustainable.
Systems thinking can provide valuable insights into income support measures that can address the economic inequality caused by the COVID-19 pandemic (Boes et al., 2021). These transfers can immediately relieve those in financial distress while boosting the economy by increasing consumer spending. Vulnerable groups that can benefit most from the systems approach include women and children ADDIN (Omukuti et al., 2021), youth (Cook et al., 2021), people with low levels of education, and migrants (Che et al., 2020). However, it is essential to ensure that these transfers benefit those who need them most, such as low-income households and people who have lost their jobs due to the pandemic, and that they do not place an excessive fiscal burden on the government.