Figures and tables in Simulations of Policy Responses and Interventions to Promote Inclusive Adaptation to and Recovery from the COVID-19 Crisis in Ecuador

Abstract

COVID-19 has had a devastating effect on the economy and the health of households around the world. In this study, we evaluate the economic impact of COVID-19, as well as the effect of government interventions aimed at alleviating it, on the welfare of Ecuadorian households in terms of income shocks, poverty rates, and inequality. The empirical strategy used is to measure mean income shock by gender and economic sector based on cross-sectional data from December 2019, May 2020, and September 2020, and use these estimates to simulate individual income shocks from the December 2019 data. This allows us to disaggregate our analysis by demographic and employment profile in order to identify groups at risk and help guide future government COVID recovery programs. We find that by May 2019, poverty had more than doubled, reaching 57%, and average income had fallen by more than 50%. Informal workers, rural populations, indigenous households, and households with young kids were among those most affected. Government interventions thus far have had a negligible effect in the aggregate, but they may have been crucial for the subsistence of households below the poverty line.

This article contains 3 figures and 9 tables.

Figures

**Figure 1.** Individual labour income in 2019/2020 by gender and income decile. Source: ENEMDU December 2019 and authors’ simulations

**Figure 2.** Income distribution pre-COVID and post-COVID (September 2020) with and without transfers. Source: ENEMDU December 2019 and authors’ simulations. From left to right, the dashed lines represent: the extreme poverty line ($47.80), the moderate poverty line ($84.81), and the minimum wage line ($400). Income in USD

**Figure 3.** Lorenz curves pre- and post-COVID. Source: ENEMDU December 2019 and authors’ simulations.

Tables

Table 1. Macroeconomic Statistics

Indicator	2015	2016	2017	2018	2019
GDP (real 2007 $)	70,174	69,314	70,955	71,870	71,909
GDP growth (% annual)	0.1%	-1.23%	2.37%	1.29%	0.05%
Per capita GDP (real 2007 $)	4,310	4,193	4,229	4,221	4,164
Per capita GDP growth (% annual)	-1.45%	-2.72%	0.85%	-0.18%	-1.36%
Public debt (% GDP)	33%	38.2%	44.6%	45.2%	44.9%
Primary fiscal deficit (% GDP)	-1.68%	-5.34%	-5.39%	-2.46%	-2.48%
Total population	16,278,844	16,528,730	16,776,977	17,023,408	17,267,986
Working age population	11,399,276	11,696,131	11,937,928	12,239,023	12,402,565
Active population	7,498,528	7,874,021	8,086,048	8,027,130	8,099,030
Activity rate (% labour force)	65.78%	67.32%	67.73%	65.59%	65.3%
Unemployment rate (% labour force)	4.77%	5.21%	4.62%	3.69%	3.84%
Informal work (% employed)*	58.4%	62.2%	63%	64.7%	66.08%
Self-employed (% employed)*	34.1%	35.9%	35.6%	36.9%	38.5%
Real mean monthly labour income^†	355.6	337.1	341.2	333.5	325.8

Source: Central Bank of Ecuador.

SEDLAC estimates.

$ USD.

Table 2. Empirical change in labour income and employment in 2019/2020 by gender and economic sector

Economic sector	Mean income among employed			%Δ employment		Expected %Δ mean income
Economic sector	12/2019	06/2020	09/2020	12/19 - 6/20	12/19 - 9/20	12/19 - 6/20	12/19 - 9/20
Female
Agriculture + fishing + mining	77.86	49.65	77.35	-26.46%	-8.49%	-53.11%	-9.10%
Industry + electricity, gas & water	324.77	221.35	278.52	-25.38%	-18.28%	-49.14%	-29.92%
Construction	422.16	432.41	426.62	-16.96%	-5.66%	-14.94%	-4.66%
Trade	277.39	165.63	236.39	-27.92%	1.39%	-56.96%	-13.59%
Restaurants & hotels	305.56	76.37	215.01	-20.97%	-9.98%	-80.25%	-36.66%
Transportation & communication	579.35	423.97	408.56	-20.00%	12.19%	-41.46%	-20.88%
Real estate	408.75	297.41	398.92	-48.04%	-1.04%	-62.20%	-3.42%
Public administration and defence	1008.34	828.78	970.17	12.01%	37.44%	-7.94%	32.24%
Education	766.74	702.07	717.59	-13.69%	-0.07%	-20.97%	-6.48%
Health	736.98	677.06	864.37	-17.13%	-4.89%	-23.87%	11.56%
Personal services	300.79	151.94	278.81	-44.36%	-33.24%	-71.89%	-38.12%
Other services	882.85	851.41	890.39	28.84%	30.29%	-16.15%	31.41%
All female	309.97	227.62	295.71	-26.42%	-7.36%	-45.97%	-11.62%
Male
Agriculture + fishing + mining	241.79	146.09	211.96	-12.89%	-7.57%	-47.37%	-18.97%
Industry + electricity, gas & water	521.88	315.27	438.02	-30.51%	-3.19%	-58.02%	-18.75%
Construction	425.92	100.86	356.34	-42.16%	-11.64%	-86.30%	-26.07%
Trade	451.57	228.04	525.78	-17.90%	-2.71%	-58.54%	13.28%
Restaurants & hotels	414.94	145.06	274.95	-17.63%	5.02%	-71.20%	-30.41%
Transportation & communication	494.78	211.28	408.98	-21.47%	-19.50%	-66.47%	-33.46%
Real estate	619.63	338.42	520.18	-24.85%	-10.52%	-58.96%	-24.88%
Public administration and defence	1016.79	925.27	1067.36	-11.51%	-9.65%	-19.48%	-5.16%
Education	819.99	695.47	926.78	-12.55%	11.28%	-25.83%	25.77%
Health	956.67	885.62	919.35	-8.14%	1.57%	-14.96%	-2.40%
Personal services	459.19	198.90	388.30	-23.87%	-16.23%	-67.02%	-29.16%
Other services	975.77	717.17	1017.63	18.44%	10.97%	-12.95%	15.73%
All male	437.45	251.64	410.99	-19.96%	-7.02%	-53.96%	-12.64%
All	384.41	242.08	363.17	-22.65%	-7.16%	-51.29%	-12.29%

Source: ENEMDU December 2019, May/June 2020, and September 2020.

Note: The last two columns take into account the change in employment as zero-income.

Note: Income in USD.

Table 3. Empirical change in non-labour income in 2019/2020

	Income			Change
	Dec. 2019	May 2020	Sept. 2020	% Δ Dec.-May	% Δ Dec.-Sept.
Non-labour income	44.34	38.37	44.30	-13.46%	-0.09%
Government transfers	4.44	5.94	4.80	33.75%	8.06%

Source: ENEMDU December 2019, May and September 2020 and authors’ calculations.

Note: Changes in May 2020 and September 2020 are calculated with respect to December 2019.

Note: Income in USD.

Table 4. Change in household per capita income in 2019/2020

	December 2019	May/June 2020		September 2020
	Income	Income	Change	Income	Change
Household per capita income	214.49	120.21	-43.95%	193.18	-9.93%
Household per capita labour income	170.14	81.83	-51.90%	148.83	-12.52%
Household per capita non-labour income	44.35	38.38	-13.46%	44.30	-0.13%

Source: ENEMDU December 2019 and authors’ simulations of post-COVID incomes.

Note: Income in USD.

Table 5. Monthly individual labour income pre- and post-COVID

Group	% of workers	December 2019	May/June 2020		September 2020
Group	% of workers	Income	Income	Change	Income	Change
By gender
Female	37.33%	389.26	205.62	-47.18%	343.53	-11.75%
Male	62.67%	474.01	216.82	-54.26%	412.6	-12.96%
By age
<26	11.11%	309.61	137.88	-55.47%	265.76	-14.16%
26-65	80.64%	476.93	231.60	-51.44%	418.23	-12.31%
>65	8.25%	282.97	127.95	-54.78%	242.50	-14.30%
By ethnicity
Indigenous	13.72%	300.51	134.19	-55.34%	256.10	-14.78%
Afro American	5.03%	379.83	181.32	-52.26%	321.26	-15.42%
Mestizo/white	73.95%	470.54	227.53	-51.65%	414.01	-12.02%
Other	7.31%	344.86	163.54	-52.58%	290.20	-15.85%
By education level
No high school	50.73%	320.6946	130.5171	-59.30%	262.7539	-18.07%
High school	33.29%	445.1933	201.1437	-54.82%	383.0887	-13.95%
Higher education	15.98%	835.7534	506.4722	-39.40%	801.7644	-4.07%
By employment type
Informal	75.19%	346.88	139.44	-59.80%	289.17	-16.64%
Formal	24.81%	669.88	387.09	-42.22%	619.47	-7.53%
By area
Rural	28.92 %	343.81	164.66	-52.11%	287.72	-16.31%
Urban	71.08%	483.09	232.47	-51.88%	427.76	-11.45%
By firm size
Big private (gt₅ employees)	23.8%	576.07	268.50	-53.39%	497.93	-13.56%
Small private	68.99%	339.61	135.30	-60.16%	282.72	-16.75%
Public	7.21%	843.22	646.44	-23.34%	864.64	2.54%
By income decile
1	10%	111.88	49.19	-56.03%	92.11	-17.67%
2	10%	185.98	78.47	-57.81%	152.43	-18.04%
3	10%	248.93	106.49	-57.22%	207.91	-16.48%
4	10%	274.42	113.7	-58.57%	227.43	-17.12%
5	10%	304.21	128.83	-57.65%	255.47	-16.02%
6	10%	344.37	143.86	-58.23%	285.62	-17.06%
7	10%	382.19	168.71	-55.86%	323.78	-15.28%
8	10%	444.31	204.22	-54.04%	381.42	-14.15%
9	10%	529.2	268.01	-49.36%	471.92	-10.82%
10	10%	976.74	525.97	-46.15%	896.08	-8.26%

Source: ENEMDU December 2019 and authors’ simulations of post-COVID incomes.

Note: Income in USD.

Table 6. Average household per capita income pre-COVID and post-COVID with and without public transfers

	Dec. 2019	Sept. 2020 simulated income
	Income	Without transfers	With transfers
All	214.49	193.19	197.99
Poor	54.24	47.53	53.36

Source: ENEMDU December 2019 and authors’ simulations.

Note: Income in USD.

Table 7. Poverty rates pre-COVID and post-COVID with and without transfers

	December 2019	May/June 2020 simulated income		September 2020 simulated income
	Income	W/out transfers	With transfers	W/out transfers	With transfers
All	23.86%	58.11%	56.51%	30.82%	30.27%
By gender
Female	24.05%	58.24%	56.60%	31.28%	30.69%
Male	23.66%	57.97%	56.40%	30.34%	29.84%
By age group
[0, 14]	34.13%	71.48%	69.93%	42.69%	42.10%
[15, 24]	24.73%	63.74%	61.74%	32.68%	32.01%
[25, 40]	20.62%	56.16%	54.31%	27.66%	27.12%
[41, 64]	17.61%	49.77%	48.20%	23.27%	22.72%
[65+]	13.30%	31.34%	30.77%	16.54%	16.35%
By ethnicity
Indigenous	49.27%	80.06%	79.84%	57.45%	57.41%
Afro American	38.05%	67.69%	66.42%	42.50%	42.16%
Mestizo/white	18.57%	52.78%	51.03%	25.39%	24.74%
Other	24.83%	62.14%	60.56%	32.26%	31.96%
By education level
No high school	29.20%	66.40%	65.06%	37.55%	37.07%
High school	12.90%	46.44%	44.03%	17.84%	17.05%
Higher education	4.01%	13.15%	12.35%	5.18%	4.96%
By employment type
Informal	25.56%	62.23%	61.54%	32.67%	32.55%
Formal	3.38%	26.18%	21.87%	5.64%	4.48%
By area
Rural	35.65%	69.28%	68.46%	43.73%	43.64%
Urban	18.36%	52.90%	50.93%	24.80%	24.04%
By geographic region
Sierra	21.07%	53.83%	52.16%	27.16%	26.66%
Costa	24.61%	61.04%	59.42%	32.17%	31.57%
Amazonia	40.82%	68.42%	67.53%	49.71%	49.31%

Source: ENEMDU December 2019 and authors’ simulations.

Note: The official poverty line is $84.81.

Table 8. Inequality measures pre- and post-COVID

	Percentile ratios				Gini
	p90/p10	p90/p50	p50/p10	p75/p25	Gini
December 2019	7.65	2.81	2.72	2.88	0.46
May/June 2020 without transfers	10.43	3.63	2.87	3.28	0.52
May/June 2020 with transfers	8.77	3.61	2.43	3.14	0.50
September 2020 without transfers	8.42	3.05	2.76	2.97	0.48
September 2020 with transfers	7.59	3.05	2.49	3.01	0.47

Source: ENEMDU December 2019 and authors’ simulations.

Table A1. Share of poor individuals by gender pre- and post-COVID

	Females			Males
	Dec. 2019	May 2020	Sept. 2020	Dec. 2019	May 2020	Sept. 2020
All	0.24	0.58	0.31	0.24	0.58	0.30
By area
Rural	0.36	0.70	0.44	0.35	0.68	0.43
Urban	0.19	0.53	0.25	0.18	0.53	0.24
By employment type
Informal	0.26	0.61	0.33	0.25	0.63	0.32
Formal	0.02	0.18	0.03	0.04	0.32	0.07
By age group
[0, 14]	0.33	0.72	0.42	0.35	0.71	0.43
[15, 24]	0.26	0.65	0.34	0.23	0.63	0.31
[25, 40]	0.23	0.59	0.30	0.18	0.54	0.25
[41, 64]	0.17	0.48	0.23	0.18	0.51	0.24
[65+]	0.12	0.30	0.16	0.14	0.33	0.18
By ethnicity
Indigenous	0.50	0.80	0.57	0.49	0.80	0.57
Afro American	0.37	0.68	0.42	0.39	0.67	0.43
Mestizo/white	0.19	0.53	0.26	0.18	0.53	0.25
Other	0.26	0.63	0.34	0.24	0.61	0.31
By education level
No high school	0.30	0.67	0.38	0.29	0.66	0.37
High school	0.14	0.48	0.20	0.12	0.45	0.16
Higher education	0.03	0.12	0.05	0.05	0.14	0.06
By geographic region
Sierra	0.21	0.54	0.27	0.21	0.54	0.27
Costa	0.25	0.61	0.33	0.24	0.61	0.31
Amazonia	0.41	0.69	0.50	0.41	0.68	0.49