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How Does Exposure to Covid-19 Influence Health and Income Inequality Aversion?

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  • Miqdad Asaria
  • Joan Costa-i-Font
  • Frank Cowell

Abstract

We study the determinants of individual aversion to health and income inequality in three European countries and the effects of exposure to COVID-19 including the effect employment, income and health shocks using representative samples of the population in each country. Comparing levels of health- and income-inequality aversion in the UK between the years 2016 and 2020 we find a significant increase in inequality aversion in both income and health domains. Inequality aversion is higher in the income domain than in the health domain and inequality aversion in both income and health domains is increasing in age and education and decreasing in income and risk appetite. However, people directly exposed to major health shocks during the COVID-19 pandemic generally exhibited lower levels of aversion to both income and health inequality. But for those at high risk of COVID-19 mortality who experienced major health shocks during the pandemic, inequality aversion was significantly higher than for those of similar individuals experiencing a health shock prior to the pandemic.

Suggested Citation

  • Miqdad Asaria & Joan Costa-i-Font & Frank Cowell, 2021. "How Does Exposure to Covid-19 Influence Health and Income Inequality Aversion?," CESifo Working Paper Series 9250, CESifo.
    • Handle: RePEc:ces:ceswps:_9250
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    2. Van Hootegem, Arno & Laenen, Tijs, 2022. "A wave of support? A natural experiment on how the COVID-19 pandemic affected the popularity of a basic income," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, issue Online Fi, pages 1-1.
    3. Bellani Luna & Fazio Andrea & Scervini Francesco, 2023. "Collective negative shocks and preferences for redistribution: Evidence from the COVID-19 crisis in Germany," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 21(2), pages 381-403, June.
    4. Attema, Arthur E. & L'Haridon, Olivier & van de Kuilen, Gijs, 2023. "Decomposing social risk preferences for health and wealth," Journal of Health Economics, Elsevier, vol. 90(C).
    5. Kerim Peren Arin & Juan A. Lacomba & Francisco Lagos & Deni Mazrekaj & Marcel Thum, 2021. "Misperceptions and Fake News during the Covid-19 Pandemic," CESifo Working Paper Series 9066, CESifo.
    6. Bental, Benjamin & Kragl, Jenny, 2021. "Inequality and incentives with societal other-regarding preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1298-1324.
    7. Licia Bobzien, 2023. "Income Inequality and Political Trust: Do Fairness Perceptions Matter?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 505-528, September.
    8. David Weisstanner, 2022. "COVID-19 and welfare state support: the case of universal basic income [Attitudinal polarization towards the redistributive role of the state in the wake of the COVID-19 crisis]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 41(1), pages 96-110.

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    More about this item

    Keywords

    inequality aversion; income; health; Covid-19; attitudes to inequality; employment shocks; health shocks; difference in differences;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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