The ‘Great Recession’ was the worst macroeconomic downturn since the 1930s in most OECD countries. In many economies, subsequent recovery has been sluggish, and has
sometimes turned into a new recession. The paper investigates the effects of the Great Recession on the distribution of household incomes. It shows that the changes between 2007 and 2009 in household incomes in total and on average, in income inequality, and in poverty rates, were modest in most of the countries studied, in spite of the depth of the recession in most countries. This outcome is remarkably different from the far more dramatic experience of the Great Depression, although not so different from some recent recessions such as the
Nordic crisis of the early 1990s. During the GR, the household sector was protected from the impact of the downturn by both automatic stabilizers and additional support of governments through the tax and benefit system. The post-2009 distributional impacts of the GR are likely
to have been considerably larger however, with greater differences across countries emerging.