## How Pandemics Leave the Poor Even Farther Behind

_IMF Blog, May 11, 2020_

## Source details

**Canonical URL:** [How Pandemics Leave the Poor Even Farther Behind](https://www.imf.org/en/blogs/articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind)

## Other formats

- [Markdown version](/en/blogs/articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind/index.md)
- [Structured JSON version](/en/blogs/articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind/index.json)
- [Bundle manifest](/en/blogs/articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind/bundle-manifest.json)

## Bibliographic details
- Authors: Davide Furceri, Prakash Loungani, Jonathan D Ostry
- Published: May 11, 2020

---

### Overview and macro context
- The COVID-19 crisis is described as "the greatest economic calamity since the Great Depression."
- In January, the IMF expected global income to grow 3 percent; it is now forecast to fall 3 percent.
- A recent poll of top economists found that the vast majority felt the COVID-19 pandemic will worsen inequality, in part through its disproportionate impact on low-skilled workers.

### Events analyzed and horizon
- Five major events analyzed: SARS (2003), H1N1 (2009), MERS (2012), Ebola (2014), and Zika (2016).
- Distributional effects are traced in the five years following each event.

### Inequality impacts (net incomes)
- The Gini coefficient (based on net incomes, i.e., market incomes after taxes and transfers) has increased steadily in the aftermath of these events.
- After five years, the net Gini has gone up by nearly 1.5 percent.
- This increase occurs despite government redistribution efforts to mitigate pandemic effects.

### Employment and education (distributional channel)
- Pandemics have disparate impacts on employment by educational attainment (an indicator of skill levels).
- Relative to population, the employment of those with advanced levels of education is scarcely affected.
- The employment of those with only basic levels of education falls sharply, by more than 5 percent at the end of five years.
- Long-lasting effects arise from job loss, lower remittances, and diminished employment prospects.

### Policy response and recommendations
- Policies must pay specific attention to preventing long-term damage (or "scarring") to the livelihoods of the least advantaged in society.
- Without strenuous and targeted attempts, inequality is likely to increase; inequality was already "one of the most complex and vexing challenges in the global economy," in the words of the IMF’s Managing Director.
- Concrete policy measures highlighted:
  - Access to sick leave, unemployment benefits, and health benefits, especially for poorer segments who lack a savings cushion.
  - A "New Deal" in sectors and regions with pervasive informal work and self-employment and scant social protection systems.
  - Expanding social assistance systems and introducing new transfers.
  - Boosting public work programs to offer job opportunities.
  - Providing financing opportunities to sustain employment.
  - Progressive tax measures (for example, a "solidarity surcharge") as part of the policy mix.
- Policymakers should use the opportunity to make fundamental changes so that future shocks (including from climate change) encounter stronger risk-sharing and social assistance mechanisms to better protect the most vulnerable.

*Source: How Pandemics Leave the Poor Even Farther Behind (IMF blog), Davide Furceri, Prakash Loungani, Jonathan D. Ostry, May 11, 2020.*

---

## Content in this bundle

- **Staff Paper**
  - [Staff Paper (Markdown version)](/-/media/files/publications/covid19-special-notes/special-series-on-covid-19-tax-issues-an-overview.pdf.md){rel="alternate" type="text/markdown"}
  - [Staff Paper (PDF)](/-/media/files/publications/covid19-special-notes/special-series-on-covid-19-tax-issues-an-overview.pdf){rel="external" type="application/pdf"}
- **Full Report**
  - [Full Report (Markdown version)](/-/media/files/publications/weo/2020/april/english/text.pdf.md){rel="alternate" type="text/markdown"}
  - [Full Report (PDF)](/-/media/files/publications/weo/2020/april/english/text.pdf){rel="external" type="application/pdf"}

---

## References

- [عربي](https://www.imf.org/ar/News/Articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind)
- [Français,](https://www.imf.org/fr/News/Articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind)
- [https://www.imf.org/fr/News/Articles/2020/05/06/blog-state-owned-enterprises-in-the-time-of-covid-19](https://www.imf.org/fr/News/Articles/2020/05/06/blog-state-owned-enterprises-in-the-time-of-covid-19)
- [日本語,](https://www.imf.org/ja/News/Articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind)
- [Português](https://www.imf.org/pt/News/Articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind?sc_mode=1)
- [,](https://www.imf.org/pt/News/Articles/2020/05/05/blog-fiscal-policies-for-the-recovery-from-covid-19)
- [https://www.imf.org/wp-content/uploads/2020/05/eng-may-5-covid-inequality-1-e1588966727283.jpg](https://www.imf.org/wp-content/uploads/2020/05/eng-may-5-covid-inequality-1-e1588966727283.jpg)
- [https://www.imf.org/wp-content/uploads/2020/05/eng-may-5-covid-inequality-2.png](https://www.imf.org/wp-content/uploads/2020/05/eng-may-5-covid-inequality-2.png)
- [words](https://blogs.imf.org/2020/01/07/reduce-inequality-to-create-opportunity/)
- [New Deal](https://blogs.imf.org/2020/04/30/a-new-deal-for-informal-workers-in-asia/)

_Source: https://www.imf.org/en/blogs/articles/2020/05/11/blog051120-how-pandemics-leave-the-poor-even-farther-behind_