{ "title": "Giving Everyone a Fair Shot", "publication": "IMF Blog, April 1, 2021", "sourceUrl": "https://www.imf.org/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot", "canonical": "https://www.imf.org/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot", "overlayPath": "/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/index.md", "summary": "

The COVID-19 pandemic is intensifying the vicious circle of inequality.", "sections": [ { "heading": "COVID-19 and inequality", "content": "- Inequality was a pre-existing condition that worsened COVID-19’s impact: disparities in access to basic services contributed to uneven health outcomes.\n- Countries with worse access to health care, proxied by the number of hospital beds, have had higher COVID-19 mortality rates than predicted by the number of cases and age structure.\n- Countries with higher relative poverty had higher rates of both cases and deaths.\n- Education losses in 2020 are estimated at a quarter of the school year in advanced economies and twice as much in emerging market and developing economies.\n- Children from poorer families have been disproportionately affected; we estimate that up to 6 million children in emerging market and developing economies could drop out of school in 2021, with lifelong adverse consequences.\n- The pandemic has hit the most vulnerable groups hardest: lower-skilled and younger workers have experienced more job losses; disadvantaged ethnic groups and informal sector workers have been harder hit; and women, overrepresented in sectors most affected by COVID-19 such as hospitality and retail, have been particularly affected, especially in poorer countries." }, { "heading": "A holistic approach", "content": "- Breaking the cycle of inequality requires both predistributive and redistributive policies:\n - Predistributive policies ensure access to basic public services and good jobs, reducing income inequality before taxes and transfers.\n - Redistributive policies (taxes and transfers) complement predistributive measures.\n- Investing in education, healthcare, and early childhood development can improve lifetime opportunities.\n - If governments increased spending on education by 1 percent of GDP, for example, they could reduce the gap in enrollment rates between the richest and the poorest families by almost one-third.\n- Governments should focus on reducing spending inefficiencies, which are sizable, especially in poorer countries.\n- Social safety nets are vital: a good social safety net that can be quickly activated provides lifelines to struggling families.\n - High social spending is effective in reducing poverty only when it provides adequate assistance and covers the poorest segments of society.\n - Developing and maintaining comprehensive social registries with a reliable citizen identification system is a good investment.\n - Effective distribution mechanisms such as e-payments and, where access to bank accounts is limited, mobile money transfers are important complements.\n- Enhancing access to basic public services will require additional resources; options include:\n - Strengthening overall tax capacity.\n - Relying more on property and inheritance taxes in many countries.\n - Raising tax progressivity where feasible, including room to increase top marginal personal income tax rates.\n - Eliminating loopholes in capital income taxation.\n - Levying temporary COVID-19 recovery contributions as supplements to personal income taxes for high-income households.\n - Modernizing corporate income taxation.\n - In emerging market economies and low-income countries, additional revenues could be raised through consumption taxes to finance social spending.\n - Low-income countries will need support from the international community to help with financing and implementing home-grown taxation and spending reforms." }, { "heading": "Strong public support needed", "content": "- Governments may want to develop comprehensive policy packages that promise expanded access to public services and better protection from income shocks while supporting a job-rich, inclusive recovery.\n- In some countries, public support for better access to basic services, financed through higher taxes, has been strong and is likely increasing with the pandemic.\n - A recent survey in the United States shows that those who had personally experienced the impact of COVID-19, either through illness or unemployment, have developed a stronger preference for more progressive taxation.\n- Such policies should be embedded in medium-term fiscal frameworks and complemented by actions that strengthen transparency and accountability.\n- Meaningful gains in spending efficiency are necessary.\n- Experience with past pandemics shows that trust in government can quickly deteriorate and contribute to greater polarization; resolute actions by governments to deliver needed services and foster inclusive growth can counteract this trend and help build social cohesion.\n\nGiving Everyone a Fair Shot — David Amaglobeli, Vitor Gaspar, Paolo Mauro, April 1, 2021.\n\n---\n\n\n References\n\n- عربي\n- 日本語\n- Português\n- our research\n- recent survey in the United States\n\nSource: https://www.imf.org/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot" } ], "bullets": [ "[Markdown version](/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/index.md)", "[Structured JSON version](/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/index.json)", "[Bundle manifest](/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/bundle-manifest.json)", "Authors: David Amaglobeli, Vitor Gaspar, Paolo Mauro", "Published: April 1, 2021", "Inequality was a pre-existing condition that worsened COVID-19’s impact: disparities in access to basic services contributed to uneven health outcomes.", "Countries with worse access to health care, proxied by the number of hospital beds, have had higher COVID-19 mortality rates than predicted by the number of cases and age structure.", "Countries with higher relative poverty had higher rates of both cases and deaths.", "Education losses in 2020 are estimated at a quarter of the school year in advanced economies and twice as much in emerging market and developing economies.", "Children from poorer families have been disproportionately affected; we estimate that up to 6 million children in emerging market and developing economies could drop out of school in 2021, with lifelong adverse consequences.", "The pandemic has hit the most vulnerable groups hardest: lower-skilled and younger workers have experienced more job losses; disadvantaged ethnic groups and informal sector workers have been harder hit; and women, overrepresented in sectors most affected by COVID-19 such as hospitality and retail, have been particularly affected, especially in poorer countries.", "Breaking the cycle of inequality requires both predistributive and redistributive policies:", "Investing in education, healthcare, and early childhood development can improve lifetime opportunities.", "Governments should focus on reducing spending inefficiencies, which are sizable, especially in poorer countries.", "Social safety nets are vital: a good social safety net that can be quickly activated provides lifelines to struggling families.", "Enhancing access to basic public services will require additional resources; options include:", "Governments may want to develop comprehensive policy packages that promise expanded access to public services and better protection from income shocks while supporting a job-rich, inclusive recovery.", "In some countries, public support for better access to basic services, financed through higher taxes, has been strong and is likely increasing with the pandemic.", "Such policies should be embedded in medium-term fiscal frameworks and complemented by actions that strengthen transparency and accountability.", "Meaningful gains in spending efficiency are necessary.", "Experience with past pandemics shows that trust in government can quickly deteriorate and contribute to greater polarization; resolute actions by governments to deliver needed services and foster inclusive growth can counteract this trend and help build social cohesion.", "[عربي](https://www.imf.org/ar/News/Articles/2021/04/01/blog-giving-everyone-a-fair-shot)", "[日本語](https://www.imf.org/ja/News/Articles/2021/04/01/blog-giving-everyone-a-fair-shot)", "[Português](https://www.imf.org/pt/News/Articles/2021/04/01/blog-giving-everyone-a-fair-shot)", "[our research](http://www.imf.org/fiscalmonitor)", "[recent survey in the United States](https://www.imf.org/en/Publications/WP/Issues/2021/02/06/Pandemic-and-Progressivity-50030)" ], "alternates": { "markdown": "/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/index.md", "json": "/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/index.json", "bundleManifest": "/en/blogs/articles/2021/04/01/blog-giving-everyone-a-fair-shot/bundle-manifest.json" }, "generatedAtUtc": "2026-08-28T18:04:13.491Z" }