Sun, 13 Jun 2021

BERLIN, May 17 (Xinhua) -- Allowances for families and the short-time work compensation by the German government in 2020 made up for 80 percent of citizens' income losses from COVID-19, according to research results released by the ifo Institute on Monday.

Gross earnings for Germans declined by around 5 percent last year, according to calculations by the ifo Institute and the European Commission's Joint Research Centre. However, the loss was reduced to 0.8 percent by special government measures and the "automatic stabilizers" in the tax and social security system.

"These results confirm our initial findings from the summer. Germany's efforts to stem the rise in income inequality and mitigate the risk of poverty have been successful," said Andreas Peichl, director of the ifo Center for Macroeconomics and Surveys.

The much used short-time work compensation, additional measures such as a 300-euro-child bonus (365 U.S. dollars) and an increased tax relief for single parents would "particularly benefit low-income households, while high-income households benefit from progressive income taxation," the ifo Institute noted.

Because some government COVID-19 measures were reduced, already expired last year or would expire this year, lower-income households in Germany are likely to "remain negatively impacted as long as the pandemic continues," said Peichl.

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