@article {10.34196/ijm.00329,
article_type = {journal},
title = {The impact of unexpected inflationary shock in 2022 and 2023 on the welfare of families: The case of Slovakia},
author = {Valachyová, Jana and Senaj, Matúš},
volume = 18,
number = 3,
year = 2025,
month = {nov},
pub_date = {2025-11-25},
pages = {50-87},
citation = {IJM 2025;18(3):50-87},
doi = {10.34196/ijm.00329},
url = {https://doi.org/10.34196/ijm.00329},
abstract = {We analyse the impact of the recent inflation surge on the welfare of Slovak families. Combining a microsimulation model SIMTASK with Household Budget Survey data lets us quantify the net effect of the shock after government relief measures and adjustments in wages and social transfers. In line with literature, we show that government measures along with automatic valorisation mechanisms helped to offset welfare decline mainly for low-income families. For high-income families wage growth was the crucial component offsetting their purchasing power drop. Considering inflation-related effects solely, our results indicate a welfare drop of 7\% for an average family in 2022. The reversed result for 2023 (increase by 5\%) is mainly due to the delay in economic adjustments. On the two-year horizon, the combination of policy measures and economic adjustments, on average, almost fully mitigated the negative effects of the inflation surge. Assessing total changes (also including inflation-unrelated effects), an increase in disposable income exceeded the inflation burden significantly for all analysed family categories. A generous permanent income support for families with children was the main driver of the welfare increase of 9\% on average. We also point to high heterogeneity of the impact across families. Despite positive average effects, 14\% of families faced a welfare drop.},
keywords = {microsimulation, inflationary shock, distributional effect, tax and transfer policy},
journal = {IJM},
issn = {1747-5864},
publisher = {International Journal of Microsimulation},
}