The Covid-19 Pandemic as a Catalyst for Income Inequality

Abstract

Abstract The goal of this paper is to examine COVID-19 potential long-run effects on income inequality, seeking answers in the wider context of inequality sources and foregoing evidence from industrialised countries. Thus, the phenomena that existed prior to the pandemic but, due to its impact, may accelerate the process of growing income inequality in the long term, must be identified. Since left unchecked, growing disparities may lead to long-lasting negative effects and forming a kind of vicious cycle, the article also seeks to present general policy proposals that possibly can mitigate disparities. According to the hypothesis, the ongoing structural transformation triggered by the pandemic can act as a catalyst for the further dynamics of increasing inequality. What has been identified as the most important drivers of inequality is digital divide, as well as automation and robotization having significant impact on the world of work.