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Will COVID-19 Have Long-Lasting Effects on Inequality? Evidence from Past Pandemics

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  • Davide Furceri
  • Mr. Prakash Loungani
  • Mr. Jonathan David Ostry
  • Pietro Pizzuto

Abstract

This paper provides evidence on the impact of major epidemics from the past two decades on income distribution. The pandemics in our sample, even though much smaller in scale than COVID-19, have led to increases in the Gini coefficient, raised the income share of higher-income deciles, and lowered the employment-to-population ratio for those with basic education compared to those with higher education. We provide some evidence that the distributional consequences from the current pandemic may be larger than those flowing from the historical pandemics in our sample, and larger than those following typical recessions and financial crises.

Suggested Citation

  • Davide Furceri & Mr. Prakash Loungani & Mr. Jonathan David Ostry & Pietro Pizzuto, 2021. "Will COVID-19 Have Long-Lasting Effects on Inequality? Evidence from Past Pandemics," IMF Working Papers 2021/127, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/127
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    Cited by:

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    2. Doran, Áine & Colvin, Christopher L. & McLaughlin, Eoin, 2024. "What can we learn from historical pandemics? A systematic review of the literature," Social Science & Medicine, Elsevier, vol. 342(C).
    3. Davide Furceri & Pietro Pizzuto & Khatereh Yarveisi, 2024. "The effect of pandemic crises on fertility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(1), pages 1-30, March.
    4. Brunckhorst,Ben James & Kim,Yeon Soo & Cojocaru,Alexandru, 2023. "Tracing Pandemic Impacts in the Absence of Regular Survey Data: What Have We Learned from the World Bank’s High-Frequency Phone Surveys?," Policy Research Working Paper Series 10585, The World Bank.
    5. Jonathan T. Rothwell & Alexandru Cojocaru & Rajesh Srinivasan & Yeon Soo Kim, 2024. "Global evidence on the economic effects of disease suppression during COVID-19," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    6. Bettarelli, Luca & Furceri, Davide & Pizzuto, Pietro & Yarveisi, Khatereh, 2024. "Crises and energy markets reforms," Energy Economics, Elsevier, vol. 136(C).
    7. Nouf Alnafisah, 2025. "The Role of Tourism Development in Promoting Income Equality: A Case Study of GCC Countries," Sustainability, MDPI, vol. 17(10), pages 1-26, May.
    8. M.D.J.W. Wijesinghe & Michael P. Cameron & Susan Olivia & Les Oxley, 2025. "A tale of three pandemics: Impacts on life expectancy and lifespan inequality," Working Papers in Economics 25/02, University of Waikato.
    9. Brunckhorst, Ben & Cojocaru, Alexandru & Kim, Yeon Soo & Kugler, Maurice, 2024. "Long COVID: The evolution of household welfare in developing countries during the pandemic," World Development, Elsevier, vol. 175(C).
    10. Sakiru Adebola Solarin & Carmen Lafuente & Luis A. Gil-Alana & Maria Jesus Gonzalez Blanch, 2022. "Inequality Persistence of 21 OECD Countries from 1870 to 2020: Linear and Non-Linear Fractional Integration Approaches," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(2), pages 711-725, November.
    11. João Tovar Jalles & Bryn Battersby & Rachel Lee, 2024. "Effectiveness of Fiscal Announcements: Early Evidence from COVID-19," Open Economies Review, Springer, vol. 35(3), pages 623-658, July.
    12. Mark Setterfield, 2023. "Will hysteresis effects afflict the US economy during the post-COVID recovery?," Working Papers 2306, New School for Social Research, Department of Economics.
    13. Sarra Ben Yahmed & Francesco Berlingieri & Eduard Brüll, 2024. "Local Labour Market Resilience: The Role of Digitalisation and Working from Home," CESifo Working Paper Series 11114, CESifo.
    14. Deb, Pragyan & Furceri, Davide & Ostry, Jonathan D. & Tawk, Nour, 2023. "Creative destruction during crises: An opportunity for a cleaner energy mix," Energy Economics, Elsevier, vol. 128(C).
    15. Christl, Michael & De Poli, Silvia & Ivaškaitė-Tamošiūnė, Viginta, 2024. "The rising tide lifts all boats? Income support measures for employees and self-employed during the COVID-19 pandemic," GLO Discussion Paper Series 1509, Global Labor Organization (GLO).
    16. Trzcińska Kamila & Zalewska Elżbieta, 2023. "A Comparative Analysis of Household Incomes of People with Different Levels of Education in Poland and the USA," Folia Oeconomica Stetinensia, Sciendo, vol. 23(2), pages 387-401, December.
    17. Bettarelli, Luca & Estefania-Flores, Julia & Furceri, Davide & Loungani, Prakash & Pizzuto, Pietro, 2023. "Energy inflation and consumption inequality," Energy Economics, Elsevier, vol. 124(C).
    18. Davide Furceri & Jun Ge & Prakash Loungani & Giovanni Melina, 2022. "The distributional effects of government spending shocks in developing economies," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1574-1599, August.

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    More about this item

    Keywords

    impact of pandemic; pandemic dummy regression; income share; pandemic event; severity of the pandemic; COVID-19; Income inequality; Income distribution; Income; Global;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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