Informality, social protection and welfare during the COVID-19 crisis in four Latin American countries

We compare the effects of labour market shocks and social policy responses on people’s welfare following the outbreak of the COVID-19 pandemic in Argentina, Brazil, Chile and Uruguay. We assess the role of formal and informal sector labour incomes and social transfers in the changes observed in the distribution of income and welfare. We worked with harmonized household survey microdata and performed a microdecomposition analysis by income source. In all four countries, the loss of earnings was the main mechanism behind the loss of income, and developments in the informal sector were crucial in explaining the rise in poverty. The effects of transfer incomes on welfare varied by country in terms of both the size of their impact and their consequences for equity.