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FEDS Note: Income Declines During COVID-19

Jeff Larrimore, Jacob Mortenson, and David Splinter

The COVID-19 pandemic caused regressive income declines, but also led to progressive policy responses. Using administrative U.S. tax data, which are a near-universal panel dataset that can track income changes over time, we consider the distribution of annual income declines during the COVID-19 pandemic relative to the Great Recession.