Effective government support can reduce poverty rates even in the thick of a pandemic, when unemployment rates reach a record high. In the first episode of the Think Diverse podcast series, Zachary Parolin tells the story of how poverty rates in the US dropped to a record low in 2020, lifting three million Americans above the poverty line.

Dr Parolin, an Assistant Professor at Bocconi University, Milan, tells host Catherine De Vries that, when unemployment raised to 20%, a level not seen since the Great Depression, the American federal government stepped in like never before with new forms of cash assistance, capable of lowering the poverty rate in the US from 19.8% in 2019 to 9.1% in 2020.

Such forms of assistance included stimulus checks, extended access to unemployment benefits, and, in 2021, unconditional child benefits.

The key lesson of the pandemic period in terms of fight on poverty, Parolin says, is that high unemployment and economic shocks have not to necessarily raise poverty or material hardship. Governments have the responsibility and the capability to reverse the process with direct income support. A more generous welfare state is good for all the families.