Does the Covid-19 Pandemic Disproportionately Affect the Poor? Evidence from a Six-Country Survey

42 Pages Posted: 15 Jun 2020 Last revised: 16 Jun 2020

See all articles by Hai-Anh Dang

Hai-Anh Dang

World Bank - Development Data Group (DECDG); IZA Institute of Labor Economics; Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); Global Labor Organization (GLO); Vietnam National University Ha Noi; Vietnam Academy of Social Sciences (VASS) - Centre for Analysis and Forecasting

Toan Luu Duc Huynh

Ho Chi Minh City University of Economics and Finance; WHU - Otto Beisheim School of Management

Manh-Hung Nguyen

TSE, LERNA-INRA

Abstract

The COVID-19 pandemic has wrought havocs on economies around the world. Yet, barely any evidence currently exists on the distributional impacts of the pandemic. We provide the first study that offers new theoretical and empirical evidence on the distributional impacts of the pandemic on different income groups in a multi-country setting. Analyzing rich individual-level data from a six-country survey, we find that while the outbreak has no impacts on household income losses, it results in a 65-percent reduction in the expected own labor income for the second-poorest income quintile.The impacts of the pandemic are most noticeable in terms of savings, with all the four poorer income quintiles suffering reduced savings ranging between 5 and 7 percent compared to the richest income quintile. The poor are also less likely to change their behaviors, both in terms of immediate prevention measures against COVID-19 and healthy activities. We also find countries to exhibit heterogeneous impacts. The United Kingdom has the least household income loss and expected labor income loss, and the most savings. Japanese are least likely to adapt behavioral changes, but Chinese, Italians, and South Koreans wash their hands and wear a mask more often than Americans.

Keywords: income quintiles, poverty, COVID-19, behavior changes

JEL Classification: D00, H00, I1, I3, O1

Suggested Citation

Dang, Hai-Anh H. and Huynh, Toan Luu Duc and Nguyen, Manh-Hung, Does the Covid-19 Pandemic Disproportionately Affect the Poor? Evidence from a Six-Country Survey. IZA Discussion Paper No. 13352, Available at SSRN: https://ssrn.com/abstract=3627054

Hai-Anh H. Dang (Contact Author)

World Bank - Development Data Group (DECDG) ( email )

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HOME PAGE: http://sites.google.com/site/haianhhdang/

IZA Institute of Labor Economics ( email )

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Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

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Global Labor Organization (GLO) ( email )

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Vietnam National University Ha Noi ( email )

Vietnam Academy of Social Sciences (VASS) - Centre for Analysis and Forecasting ( email )

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Hanoi
Vietnam

Toan Luu Duc Huynh

Ho Chi Minh City University of Economics and Finance ( email )

59C Nguyen D├Čnh Chieu
6th Ward, District 3
Ho Chi Minh City, Ho Chi Minh 70000
Vietnam

WHU - Otto Beisheim School of Management ( email )

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Germany

Manh-Hung Nguyen

TSE, LERNA-INRA ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

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