Two crises, two policy responses in Spain? Poverty among working-age population in the Great Recession and Covid-19

This research analyses the poverty risk of the working-age population in Spain during the Great Recession and the Covid-19 pandemic, the two recent economic crises that have had a major social impact in most European countries. The general analytical objective is to compare the risks of moderate and severe poverty in both recessions. This is addressed through three specific objectives: monitoring their evolution, examining the risk profiles associated with each recession, and assessing how the composition of household income in terms of access to social benefits and labour income contributes to alleviating the impact of negative economic periods on poverty. The Spanish European Union Survey on Income and Living Conditions is used for the periods 2008–20, incorporating information on personal and household income and socio-economic characteristics. The results show that the Great Recession had a larger and longer lasting effect on poverty (especially severe poverty), while Covid-19 led to a faster but more temporary increase, which was mitigated by implemented policy responses such as furlough employment schemes and a more flexible access to certain social benefits. One strategy that has been gaining prominence to avoid economic vulnerability is the combination of these benefits with employment, as well as various social transfers being allocated at the household level. The results underline the importance of articulating social protection mechanisms by linking them to labour market opportunities to cushion the effects of economic downturns, but also by targeting these policies appropriately on the most vulnerable groups among the working-age population.