In a recent paper published yesterday by the Economic and Social Research Institute (ESRI), the think tank analyses the potential costs and distributional effect of COVID-19 related unemployment in Ireland. The research suggests that the measures announced by Government will significantly cushion incomes from COVID-19 related job losses. It finds that the flat-rate Pandemic Unemployment Payment (PUP) of €350 per week does most to support incomes, reducing the number who lose more than 20 per cent of their disposable income by around a third.

According to the ESRI: “The Government’s policy response will significantly reduce the number of families who see extreme reductions in their income as a result of job losses related to the ongoing COVID-19 pandemic. However, the rise in unemployment will bring significant costs to the exchequer: around €800 million per quarter for every 100,000 individuals who lose their job.”

The research also finds that the additional cost of the Government’s Temporary Wage Subsidy Scheme may be minimal, in part because its current design is less generous to lower earners than the Pandemic Unemployment Payment they would receive if laid off by their employer.