Allocating COVID-19 State Aid Equitably: The Case of Denmark

Recently, individual states have decided to restrict COVID-19 financial aid measures to those who have paid taxes to said state thus generally excluding those who are working cash-in-hand/unreported employment, unemployed, students, or retired. This contribution assesses COVID-19 financial support packages with an emphasis on common state aid features targeting individuals with the intention to critically evaluate if, when, and how these measures discriminate against the socio-economic status of the recipient. The impact that COVID-19 has had on income-generating activities is especially harsh for unprotected workers and the most vulnerable groups in the informal economy. The preliminary results of this study indicate that impoverished and vulnerable groups such as immigrants, cash-in hand workers/unreported workers, unemployed, students, and pensioners are not only at risk of losing their sources of income due to the pandemic´s economic effects, but they are also excluded from receiving crucial financial aid. This illustrates that there is great need for a revision of national COVID-19 policies and budget allocations to ensure a more equitable protection of individuals.