The Impact of COVID-19 on Global Inequality and Poverty

COVID-19 has had catastrophic economic consequences worldwide. This paper tries to quantify the consequences of the pandemic on global inequality and poverty in 2020. To this end, a combination of data sources is used including (i) actual income data from National Statistical Offices, (ii) high-frequency phone surveys, and (iii) sectoral and aggregate GDP growth forecasts from national accounts. Results suggest that the world in 2020 witnessed the largest increases to global poverty and inequality since at least 1990. These findings are primarily driven by country-level shocks to average incomes and an increase in between-country inequality. Increases in between-country inequality are driven by the finding that middle-income countries were hit hardest. Changes in within-country inequality were relatively modest, particularly in high-income countries, many of which saw inequality decline in 2020.

Authors: Christoph Lakner (World Bank) Nishant Yonzan (World Bank) Daniel Gerszon Mahler (World Bank)

Speaker: Daniel Gerszon Mahler is economist at the World Bank’s Development Data Group.

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