Inequality in India Declined during COVID

54 Pages Posted: 27 Dec 2021

See all articles by Arpit Gupta

Arpit Gupta

NYU Stern School of Business

Anup Malani

University of Chicago - Law School; National Bureau of Economic Research (NBER); University of Chicago Pritzker School of Medicine; Resources for the Future

Bartosz Woda

University of Chicago - Law School

Multiple version iconThere are 2 versions of this paper

Date Written: December 17, 2021

Abstract

We use a large, representative panel data set from India with monthly data on household finances to examine the incidence of economic harms during the COVID pandemic. We observe a sharp spike in poverty, peaking during India’s sharp but short lockdown. However, there was a striking decrease in income inequality outside the lockdown. There was a smaller decrease in consumption inequality, likely due to consumption smoothing. Evidence supports two mechanisms for the decline in income inequality: the capital income of top-quartile earners covaries more with aggregate income, and demand for labor fell more for higher quartiles.

Suggested Citation

Gupta, Arpit and Malani, Anup and Woda, Bartosz, Inequality in India Declined during COVID (December 17, 2021). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2021-147, Available at SSRN: https://ssrn.com/abstract=3990161 or http://dx.doi.org/10.2139/ssrn.3990161

Arpit Gupta

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National Bureau of Economic Research (NBER)

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University of Chicago Pritzker School of Medicine

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Resources for the Future

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Bartosz Woda

University of Chicago - Law School ( email )

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