Abstract
ABSTRACT We study economic vulnerability to the stay-at-home orders and social distancing measures imposed to prevent COVID-19 contagion in the US by education, race, gender, and state. Under 2 months of lockdown plus 10 months of partial functioning we find that, without compensating policies, wage inequality and poverty would increase in the US for all social groups and states. We estimate a national potential increase in inequality of 4.1 Gini points and of 9.7 percentage points for poverty, with uneven increases by race, gender, and education. The restrictions imposed to curb the pandemic produce a double process of divergence: both inequality within and between social groups increase, with education accounting for the largest part of the rise in inequality between groups. Education level differences also impact wage poverty risk more than differences by race or gender, making the low-educated the most vulnerable group, while workers with higher education of any race and gender are less exposed. When measuring the potential percentile rank change, most women with secondary education or higher move up, while most men without higher education suffer downward mobility. Our findings can inform public policy aiming to address the disparities in vulnerability to pandemic-related shocks across different socioeconomic groups.
Highlights
The lockdown and social distancing measures imposed by governments have been vital to control the COVID-19 pandemic around the world, save lives and avoid the collapse of healthcare systems, but have had dramatic economic consequences.2 the International Monetary Fund estimates a global growth contraction of 3.5 percent for 2020, being the drop in real GDP for the advanced economies 4.9 percent (IMF, 2021).Importantly, the policies necessary to curb the pandemic are estimated to produce significant distributional changes (Bartik et al, 2020; Bonacini et al, 2020, Furcery et al, 2020; Palomino et al, 2020; Kim et al, 2021)
This paper has presented a detailed picture of the uneven effects that the lockdown and social distancing measures implemented to prevent the propagation of the COVID-19 pandemic are causing on the wage distribution in the United States overall and, crucially, for different sociodemographic groups based on gender, race and education
Our results reveal a sizeable increase in wage inequality (4.1 Gini points) and poverty (9.7 percentage points) at the national level, with inequality and poverty increasing in all of the US states
Summary
The lockdown and social distancing measures imposed by governments have been vital to control the COVID-19 pandemic around the world, save lives and avoid the collapse of healthcare systems, but have had dramatic economic consequences. the International Monetary Fund estimates a global growth contraction of 3.5 percent for 2020, being the drop in real GDP for the advanced economies 4.9 percent (IMF, 2021). Asians reach both the largest and the smallest values of the LWA index, depending on their educational level: when we focus on workers with primary or no education, Asians are the racial group with occupations less able to keep their labor activity under the pandemic, while the opposite happens when we consider graduate Asians. They are, the group of workers occupationally best prepared to bear the working restrictions of the pandemic (Table 1). Overall and across all racial groups, high-educated workers (graduate) are much less likely to go into poverty than all their less educated counterparts, as we will formalize in section 4 using a relative poverty risk measure
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