The impact of CERB subsidy policy on the Canadian economy

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The impact of CERB subsidy policy on the Canadian economy

Introduction

In the wake of the current COVID-19 pandemic, various parts of the world have experienced unprecedented challenges in employment and public health structures. The pandemic has substantially impacted the global economy, leading to social disruptions with numerous people losing their jobs and jobs, and the conditions continue to worsen. In response to the COVID-19 pandemic, the government of Canada reacted to set up the Canada Emergency Response Benefit (CERB) aimed at providing support to Canadians directly affected by the pandemic. CERB provided financial subsidies and relief to self-employed and employed who lost their employment as a result of the pandemic. Therefore, this study seeks to address the economic question “What is the impact of CERB subsidy policy on the Canadian economy?” given the country needs to recover from the pandemic.

Section 1

Snapshot of Households That Received the Canada Emergency Response Benefit and Paths for Further Investigation

Article Link: https://cirano.qc.ca/files/publications/2020PE-30.pdf

Achou et al. (2020) study seeks to understand the impact CERB’s assistance had on its household beneficiaries to recover the economy. On the other hand, this study seeks to understand the implications of CERB’s subsidy policy on the Canadian economy. Therefore, Achou et al. (2020) and this study share a common goal to understand the impact of CERB on the economy and household lives, respectively.

The data used for the Achou et al. (2020) study was observational data. The data was collected through an online random survey in which individuals aged 25 to 64 were targeted. This study can be regarded as a natural experiment because a set of observation data is used to monitor the impact of the CERB subsidy policy and its changes during the pandemic. The type of data was time-series data. The data was collected daily from May 8 to May 20, 2020. The study also observed 3009 household individuals of Quebec with the Statistics Canada’s 2016 Census as the data source.

Achou et al. (2020) found out that CERB applicants were more likely from the poorest households because they were the most affected household with low employment incomes. Also, households with substantial savings also opted for the CERB’s subsidy. The study recommends that CERB’s subsidy to be extended or replaced with a similar program because it was essential. From Achou et al. (2020) study, it is clear the CERB subsidy policy positively impacts the livelihood of the households in Quebec, reducing the economic vulnerabilities at the household level. Therefore, CERB’s subsidy policy is essential in maintaining economic growth and curbing economic recession.

Achou et al. (2020) use a linear model with employment income and expenditure variables. Internally, the study has an adequate sample size appropriate to draw a conclusion from the employment income and expenditure variables. However, the study does not clearly state the type of estimate model applied. Externally, the author’s conclusion is valid from the sample size used. In addition, the data used for the study is recent and would apply under the current conditions.

Section 2

Considerations for basic income as a COVID-19 response

Article Link: https://www.policyschool.ca/wp-content/uploads/2020/05/Basic-Income-Green-Kesselman-Tedds.pdf

The “considerations for basic income as a COVID-19 response” addresses the state of the Canadians who have been affected by the covid-19 pandemic. The article addresses the economic situation through provisions of basic income, which relates to the CERB subsidy policy’s economic impact in Canada.

The article’s data is experimental. The information gathered is subject to Canadians who were affected by the lockdown (Green et al., 2020). The data is cross-sectional data because it is collected by observing how the Canadians were affected at covid-19. The unit observed in the data is the household. The data is sourced on the School of Public Policy Publications, SPP Briefing Paper published in May 2020. The article uses a linear model with ordinary least squares as its empirical model and estimation method.

The article articulates the provision of basic income to every Canadian who was affected by the covid-19 lockdown. In providing the basic income, the government should implement a practical form and considerations such as the complexity and examination of the full range basic income approaches and the questions that may arise in the direct income (Green et al., 2020). The desirability and feasibility of the basic income approach must be examined. The basic income must be based on social justice, transparency, and simplicity to be more effective (Green et al., 2020). The basic income’s objective is to eradicate poverty, reform society, and change the nature of the labor environment.

Internally, the article provides an empirical analysis of the economic crisis and reviews the consequences of the actions to undertake. Also, the article does and provides an executive summary of what it entails. Externally, the article incorporates ideas from the Canadian government to allocate the basic income. However, the article does not critically evaluate how the resource would be divided among Canadians.

Section 3

The impacts of the pandemic on personal finances

Article Link: https://cirano.qc.ca/files/publications/2020PE-25.pdf

The primary question in the research is to determine the impact of the COVID-19 pandemic on personal spending. The research study was done to find out the impact of the pandemic on the personal earnings of the households of Quebec (ACHOU et al., 2020). The article is related to the research questions since it attempts to explore how CERB benefitted individual s who were unable to meet their needs.

The research employed an experimental data method that was generally based on field experiments. The researchers conducted a series of surveys on Quebec’s respondents through a panel titled “Asking Canadians” (ACHOU et al., 2020). The type of data was a time series, while the unit of observations was households of Quebec. The Source of data was RSCI-CREEi-CIRANO Web Survey done between 8th and 20th May 2020. ACHOU et al. (2020) mentioned that a sample of 3009 respondents in Quebec between 25 to 64 years old was used. A linear research model was used because of the bivariate variables to predict outcomes and cause.

Generally, the overall income and spending of households reduced by small figures in April 2020 despite the economic recession. Meaning, households had better expenditure strategies (ACHOU et al., 2020). The use of physical data to summarize the research findings of the study makes it easy for readers to interpret data and relate findings to the main research question. It implies that the details found in this paper are extremely important. One external weakness of the paper is that the involved parties or we have less control over the cause of the problem in question.

Conclusion

In general, addressing the impacts of the CERB subsidy policy, the three articles imply that the CERB subsidy impacts the livelihood of the households by reducing the economic vulnerabilities at the household level. Therefore, CERB’s subsidy policy is essential to the Canadian economy because it helps to maintain economic growth and curb economic recession.

References

Achou, B., Boisclair, D., D’ASTOUS, P. H. I. L. I. P. P. E., Fonseca, R., Glenzer, F., & Michaud, P. C. (2020). Snapshot of Households That Received the Canada Emergency Response Benefit and Paths for Further Investigation (No. 2020pe-30). CIRANO.

Green, D. A., Kesselman, J. R., & Tedds, L. M. (2020). Considerations for Basic Income as a Covid-19 Response. The School of Public Policy Publications.

ACHOU, B., BOISCLAIR, D., D’ASTOUS, P., FONSECA, R., GLENZER, F., & MICHAUD, P. (2020). Impacts of the Pandemic on Personal Finances: A Preliminary Assessment [Ebook] (p. 6).