COVID-19, subjective well-being and basic income support in Germany

Abstract We investigate the general effect of the COVID-19 pandemic on subjective well-being and determine whether this effect differs between recipients of basic income support (BIS) and the rest of the working-age population in Germany. BIS recipients constitute one of the most disadvantaged groups in Germany and might lack resources for coping with the crisis. Thus, our analysis contributes to investigations of whether the pandemic exacerbates or equalises preexisting social inequality. Our analysis employs data from the panel survey “Labour Market and Social Security” (PASS). These data have the key advantage that the collection in 2020 started prior to implementation of the first COVID-19-related policies. This situation enables us to apply a difference-in-differences approach to investigate the causal change in subjective well-being. Our results suggest that well-being declined during the first phase of the COVID-19 pandemic. However, we find no difference in this decline between BIS recipients and other German residents. Thus, our results suggest that the first phase of the COVID-19 pandemic neither exacerbated nor equalised pre-existing inequalities.