We have lived with COVID-19 for almost two years. It has affected economies all around the world, particularly in the developing world. But what about inequality? Has COVID-19 affected inequality in developing economies and how? Now two...
moreWe have lived with COVID-19 for almost two years. It has affected economies all around the world, particularly in the developing world. But what about inequality? Has COVID-19 affected inequality in developing economies and how? Now two years after the start of the pandemic we have some, albeit incomplete and scattered, evidence about this impact. While discussing this issue, we should have in mind that inequality has different dimensions; in addition to income inequality (which is the most often used measure of inequality), there is also wealth inequality as well as inequality in access to services. This paper focuses on within-country income inequality while hypothesizing about the impact of income inequality on access to basic social services (such as healthcare and education), and its impact on income inequality in the medium and long run. There are reasons to expect that developing economies may experience a higher increase in inequality under COVID-19 due to some structural features, which make them susceptible to higher inequality under economic stress. The paper discusses those structural features in the form of stylized facts with an analysis of how their potential impact on inequality may have been exacerbated by the pandemic.
