PHOTO: GETTY IMAGES / PEDRO PARDO
The severe impact of the COVID-19 pandemic is clearly seen in the numbers: more than 3.1 million deaths and rising, 120 million people pushed into extreme poverty, and a massive global recession. As suffering and poverty have risen, some data show an increase in another extreme: the wealth of billionaires.
With both extreme poverty and billionaire wealth on the rise, the pandemic’s effect on inequality may appear obvious. The reality is not as simple as you may think.
Inequality is a notoriously challenging concept on which to make definitive statements. Inequality of what? Of household income or of GDP per capita? Or even of mortality rates themselves, across different groups? Inequality among whom: should it be viewed at the level of individuals? Households? Countries? Even once a distribution is precisely specified—so that we are clear about what is distributed among whom—firm conclusions about the direction of inequality change will generally depend on what part of the distribution you care about most. Different measures of inequality— such as the Gini coefficient, the Theil index, and the income share of the wealthiest in society—are sensitive to different parts of the distribution and can in principle rank inequality before and after the pandemic differently. Clarity about which inequality is being measured matters a great deal for assessing the unequal impact of the pandemic.
Consider first the global distribution of COVID-19 mortality itself. Using the concept of life years lost to the disease—estimated using ages at death and the residual life expectancies at those ages—we find that the mortality burden of the pandemic is positively correlated with national income per capita, despite the superior health and public prevention systems in rich countries (Ferreira and others 2021). The chart plots the number of years of life lost to the pandemic per 100,000 inhabitants against GDP per capita for 145 countries, using log scales on both axes (see chart, next page).
Although there is enormous variation at each income level—with Brazil’s mortality burden (adjusted by population) 1,000 times greater than Thailand’s, for example—there is nonetheless a very clear positive association. Richer countries suffer greater losses of life years per capita than poorer countries. Measurement error is likely substantial, with a number of poor countries, such as Burundi and Tanzania, clearly underreporting deaths, but the association is so strong that it is unlikely to be spurious. Among other things, it reflects the older age structure of the population in richer countries and an illness whose lethality is highly age-selective. Higher life expectancies, greater urbanization, and the pandemic’s spread along major trade routes also likely have played a role.
Clark, Andrew, Conchita D’Ambrosio, and Anthony Lepinteur. 2020. “The Fall in Income Inequality during COVID-19 in Five European Countries.” ECINEQ Working Paper 2020–565, Society for the Study of Economic Inequality, Palma de Mall orca, Spain.
Deaton, Angus. 2021. “COVID-19 and Global Income Inequality.” NBER Working Paper 2 8392, National Bureau of Economic Research, Cambridge, MA.
Ferreira, Francisco, Olivier Sterck, Daniel Mahler, and Benoît Decerf 2021. “Death and Destitution: The Global Distribution of Welfare Losses from the COVID-19 Pandemic.” LSE Public Policy Review 1(4), 2.