The Unassuming Economist

The outbreak of the novel Coronavirus, or COVID-19, has exacerbated economic and social inequalities. Several studies have tried to capture the impact of the same using extensive qualitative and quantitative data, spanning diverse categories like economic backgrounds, geographical regions, sex, caste, color, and other such social identities, inter alia.

The NBER paper, Inequality in the Times of a Pandemic (2022), by Stefanie Stantcheva, maps findings “related to inequalities across the income distribution, sectors and regions, gender, and inequalities in education inputs for children from different socioeconomic backgrounds”.

On similar lines but delving deeper on the issue of income inequalities, the paper, Epidemics, pandemics and income inequality (2022) in Health Economics Review attempts to understand how the outbreak of diseases like the Coronavirus, Ebola, Avian flu, etc., have impacted income distributions in the first two decades of the 21st century. The paper develops a model that indicates a positive association between these health crises and income inequality. To empirically test theoretical predictions, it explores the effect on the Gini coefficient of a dummy variable that indicates the occurrence of an epidemic or a pandemic in a country in a given year and the number of deaths per 100,000. To properly address potential endogeneity, the authors implement a Three-Stage-Least Squares technique. The estimation shows that the number of deaths per 100,000 population variable has a statistically significant positive effect on the Gini coefficient, especially when COVID-19 data is included.