Economic effects of the corona pandemic on private households

The COVID-19 pandemic and response measures have triggered the worst recession in post-war German history. It is still completely unclear how quickly and how well the German economy will recover from this unique economic shock. The slowdown in economic activity is also characterized by a number of peculiarities compared with past recessions, especially those resulting from the Great Recession. First, the economic consequences appear to be quite heterogeneous across sectors, which also translates into an unequal distribution of income and employment effects at the level of private households. Second, the federal and state governments have implemented significant measures to limit the negative economic consequences of the COVID-19 pandemic. Against this background, this report examines which groups of individuals and private households are affected by the economic consequences of the COVID-19 pandemic and how. The focus is on financial and employment consequences. Furthermore, it assesses to what extent the diagnosed negative effects are covered by existing or newly added measures and instruments of the welfare state for different affected groups. Based on this diagnosis, further policy options are discussed