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Inequality in Life and Death

Author

Listed:
  • Martin S. Eichenbaum

    (Northwestern University and NBER)

  • Sergio Rebelo

    (Northwestern University, NBER, and CEPR)

  • Mathias Trabandt

    (Goethe University Frankfurt
    Halle Institute for Economic Research (IWH))

Abstract

We argue that the COVID epidemic disproportionately affected the economic well-being and health of poor people. To disentangle the forces that generated this outcome, we construct a model that is consistent with the heterogeneous impact of the COVID recession on low- and high-income people. According to our model, two-thirds of the inequality in COVID deaths reflect preexisting inequality in comorbidity rates and access to quality health care. The remaining third stems from the fact that low-income people work in occupations where the risk of infection is high. Our model also implies that the rise in income inequality generated by the COVID epidemic reflects the nature of the goods that low-income people produce. Finally, we assess the health–income trade-offs associated with fiscal transfers to the poor and mandatory containment policies.

Suggested Citation

  • Martin S. Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2022. "Inequality in Life and Death," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 70(1), pages 68-104, March.
    • Handle: RePEc:pal:imfecr:v:70:y:2022:i:1:d:10.1057_s41308-021-00147-3
    DOI: 10.1057/s41308-021-00147-3
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    Cited by:

    1. Almås, Ingvild & Bold, Tessa & von Carnap, Tillmann & Ghisolfi, Selene & Sandefur, Justin, 2023. "The macroeconomics of pandemics around the world: Lives versus livelihoods revisited," Journal of Development Economics, Elsevier, vol. 163(C).
    2. Eichenbaum, Martin S. & Rebelo, Sergio & Trabandt, Mathias, 2022. "The macroeconomics of testing and quarantining," Journal of Economic Dynamics and Control, Elsevier, vol. 138(C).
    3. Gonzalez-Eiras, Martín & Niepelt, Dirk, 2022. "The political economy of early COVID-19 interventions in US states," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
    4. Johnna Montgomerie, 2023. "COVID Keynesianism: locating inequality in the Anglo-American crisis response," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(1), pages 211-223.
    5. Ascari, Guido & Colciago, Andrea & Silvestrini, Riccardo, 2023. "Business dynamism, sectoral reallocation and productivity in a pandemic," European Economic Review, Elsevier, vol. 156(C).
    6. Stankov, Petar, 2024. "Will voters polarize over pandemic restrictions? Theory and evidence from COVID-19," Economic Modelling, Elsevier, vol. 136(C).
    7. Hevia, Constantino & Macera, Manuel & Neumeyer, Pablo Andrés, 2022. "Covid-19 in unequal societies," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
    8. Goldfayn-Frank, Olga & Lewis, Vivien & Wehrhöfer, Nils, 2022. "Spending effects of child-related fiscal transfers," Discussion Papers 26/2022, Deutsche Bundesbank.

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    More about this item

    Keywords

    Epidemic; Inequality; Recession;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • I1 - Health, Education, and Welfare - - Health
    • H0 - Public Economics - - General

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