COVID-19 and Inequality in Asia: Breaking the Vicious Cycle

Author/Editor:

Emilia M Jurzyk ; Medha Madhu Nair ; Nathalie Pouokam

Publication Date:

October 16, 2020

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

The COVID-19 pandemic risks exacerbating inequality in Asia. High frequency labor surveys show that the pandemic is having particularly adverse effects on younger workers, women and people that are more vulnerable. Pandemics have been shown to increase inequalities. As a result, income inequality, which was already high and rising in Asia before the pandemic, is likely to rise further over the medium term, unless policies succeed in breaking this historical pattern. Many Asian governments have implemented significant fiscal policy measures to mitigate the pandemic’s effect on the most vulnerable, with the impact depending on the initial coverage of safety nets, fiscal space, and degree of informality and digitalization. The paper includes model-based analysis which shows that policies targeted to where needs are greatest are effective in mitigating adverse distributional consequences and underpinning overall economic activity and virus containment.

Series:

Working Paper No. 20/217

Frequency:

regular

English

Publication Date:

October 16, 2020

ISBN/ISSN:

9781513559179/1018-5941

Stock No:

WPIEA2020217

Format:

Paper

Pages:

23

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