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The Impact of COVID-19 Lockdowns and Expanded Social Assistance on Inequality, Poverty and Mobility in Argentina, Brazil, Colombia and Mexico

Author

Listed:
  • Nora Lustig

    (Tulane University)

  • Valentina Martinez Pabon

    (Tulane University)

  • Federico Sanz

    (Tulane University)

  • Stephen D. Younger

    (CEQ Institute)

Abstract

We use microsimulation to estimate the distributional consequences of covid-19-induced lockdown policies in Argentina, Brazil, Colombia and Mexico. Our estimates of the poverty consequences are worse than many others’ projections because we do not assume that the income losses are proportionally equal across the income distribution. We also simulate the effects of most of the expanded social assistance governments have introduced in response to the crisis. This has a large offsetting effect in Brazil and Argentina, much less in Colombia. In Mexico, there has been no such expansion. Contrary to prior expectations, we find that the worst effects are not on the poorest, but those (roughly) in the middle of the ex ante income distribution. In Brazil we find that poverty among the afrodescendants and indigenous populations increases by more than for whites, but the offsetting effects of expanded social assistance also are larger for the former. In Mexico, the crisis induces significantly less poverty among the indigenous population than it does for the nonindigenous one. In all countries the increase in poverty induced by the lockdown is similar for male- and female-headed households but the offsetting effect of expanded social assistance is greater for female-headed households.

Suggested Citation

  • Nora Lustig & Valentina Martinez Pabon & Federico Sanz & Stephen D. Younger, 2020. "The Impact of COVID-19 Lockdowns and Expanded Social Assistance on Inequality, Poverty and Mobility in Argentina, Brazil, Colombia and Mexico," Working Papers 558, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2020-558
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    Cited by:

    1. Martijn Burger & Martijn Hendriks & Elena Ianchovichina, 2022. "Happy but Unequal: Differences in Subjective Well-Being across Individuals and Space in Colombia," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(3), pages 1343-1387, June.
    2. Decerf, Benoit & Ferreira, Francisco H.G. & Mahler, Daniel G. & Sterck, Olivier, 2021. "Lives and livelihoods: Estimates of the global mortality and poverty effects of the Covid-19 pandemic," World Development, Elsevier, vol. 146(C).
    3. Guido Neidhöfer & Nora Lustig & Mariano Tommasi, 2021. "Intergenerational transmission of lockdown consequences: prognosis of the longer-run persistence of COVID-19 in Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 571-598, September.
    4. Isaure Delaporte & Julia Escobar & Werner Peña, 2021. "The distributional consequences of social distancing on poverty and labour income inequality in Latin America and the Caribbean," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(4), pages 1385-1443, October.
    5. Gonzalo Gomez Bengoechea, 2021. "The impact of the COVID-19 crisis on income distribution under different protection schemes: the case of Spain," Public Sector Economics, Institute of Public Finance, vol. 45(4), pages 517-541.
    6. Ben Yahmed, Sarra & Cappellari, Lorenzo & Checchi, Daniele & Corak, Miles & Jenkins, Stephen P. & Neidhöfer, Guido & Tertilt, Michele & Tommasi, Mariano, 2020. "COVID-19 and inequality," ZEW policy briefs 5/2020, ZEW - Leibniz Centre for European Economic Research.
    7. Mendoza-Lozano, Frederick Andrés & Quintero-Peña, Jose Wilmar & García-Rodríguez, Jose Felix, 2021. "The digital divide between high school students in Colombia," Telecommunications Policy, Elsevier, vol. 45(10).
    8. Sébastien CARRERE & Matthieu CLEMENT & François COMBARNOUS & Gabriel KESSLER & Eric ROUGIER & Ariel WILKIS, 2022. "The middle class in Argentina: dynamics, characteristics and implications for public policies," Working Paper 83de5468-cd86-4702-a4a8-6, Agence française de développement.
    9. Angelo Cozzubo & Javier Herrera & Mireille Razafindrakoto & François Roubaud, 2021. "El impacto de políticas diferenciadas de cuarentena sobre la mortalidad por COVID-19: el caso de Brasil y Perú," Documentos de Trabajo / Working Papers 2021-501, Departamento de Economía - Pontificia Universidad Católica del Perú.
    10. Hoehn-Velasco, Lauren & Silverio-Murillo, Adan & de la Miyar, Jose Roberto Balmori, 2021. "The great crime recovery: Crimes against women during, and after, the COVID-19 lockdown in Mexico," Economics & Human Biology, Elsevier, vol. 41(C).
    11. F. Yudhi Priyo Amboro, 2021. "The Corporate Rescue for Companies during the COVID-19 Pandemic in Indonesia: Prospects for the Concept of Deeds of Arrangement and Administration Order," Technium Social Sciences Journal, Technium Science, vol. 23(1), pages 385-400, September.
    12. Nakamura, Nobuyuki & Suzuki, Aya, 2021. "COVID-19 and the intentions to migrate from developing countries: Evidence from online search activities in Southeast Asia," Journal of Asian Economics, Elsevier, vol. 76(C).
    13. Francisco Corona & Graciela Gonz'alez-Far'ias & Jes'us L'opez-P'erez, 2021. "A nowcasting approach to generate timely estimates of Mexican economic activity: An application to the period of COVID-19," Papers 2101.10383, arXiv.org.
    14. Oliver Fiala & Enrique Delamónica & Gerardo Escaroz & Ismael Cid Martinez & José Espinoza-Delgado & Aristide Kielem, 2021. "Children in Monetary Poor Households: Baseline and COVID-19 Impact for 2020 and 2021," Economics of Disasters and Climate Change, Springer, vol. 5(2), pages 161-176, July.
    15. Nora Lustig & Valentina Martinez Pabon & Guido Neidhöfer & Mariano Tommasi, 2020. "Short and Long-Run Distributional Impacts of COVID-19 in Latin America," Working Papers 2013, Tulane University, Department of Economics.
    16. H. Xavier Jara & Lourdes Montesdeoca & Iva Tasseva, 2022. "The Role of Automatic Stabilizers and Emergency Tax–Benefit Policies During the COVID-19 Pandemic: Evidence from Ecuador," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(6), pages 2787-2809, December.
    17. Ambrosius, Christian & Campos Vázquez, Raymundo M. & Esquivel, Gerardo, 2021. "What drives remittances during a global shock? Evidence from the COVID-19 pandemic in Mexico," Discussion Papers 2021/13, Free University Berlin, School of Business & Economics.
    18. Hoehn-Velasco, Lauren & Silverio-Murillo, Adan & Balmori de la Miyar, Jose Roberto, 2021. "The long downturn: The impact of the great lockdown on formal employment," Journal of Economics and Business, Elsevier, vol. 115(C).
    19. Magalasi, Chimwemwe, 2021. "The short-term distributional impact of COVID-19 in Malawi," EUROMOD Working Papers EM7/21, EUROMOD at the Institute for Social and Economic Research.
    20. Amarante, Verónica, 2022. "Fortalecimiento de los sistemas de protección social de la región: aprendizajes a partir de la pandemia de COVID-19," Documentos de Proyectos 47830, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    21. Palacios-Lopez,Amparo & Newhouse,David Locke & Pape,Utz Johann & Khamis,Melanie & Weber,Michael & Prinz,Daniel, 2021. "The Early Labor Market Impacts of COVID-19 in Developing Countries : Evidence from High-Frequency Phone Surveys," Policy Research Working Paper Series 9510, The World Bank.
    22. Luis Huesca & Linda Llamas & H. Xavier Jara & César O. Vargas Téllez & David Rodríguez, 2021. "The impact of the COVID-19 pandemic on poverty and inequality in Mexico," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(3), pages 1-19, Julio - S.

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    More about this item

    Keywords

    Covid-19; inequality; poverty; mobility; microsimulations; Latin America;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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