Gaps in How We Study The Impact of Covid On Inequality

Context: While a recent paper argues that pandemic has actually acted as a 'great leveller' of inequalities, such studies are challenged by inadequate coverage.

Three concepts are used for inequality measurement: (what the Gini coefficient seeks to do).

• The first concept considers the dispersion of per-capita income among nations, with each a unit of observation.
• The second considers the dispersion of per-capita income between countries, but with each weighted by population. 
• The third considers the distribution of income within countries, which Branko Milanovic (2011) calls Concept 3 inequality.

Pandemic as the "Great leveller" of inequality: As argued by Nobel Laureate Angus Deaton in his recent paper "Covid-19 and Global Income Inequality", there are three key analytical points -

• Richer countries had higher Covid mortality rates, despite better and more technically advanced medical systems, than less developed nations;
• Economic growth levels fell more rapidly in countries with the higher per-capita gross domestic product (GDP);
• More generally, for a given shock-like Covid, economic growth tends to fall for nations with higher income-per-head.
  • If one includes data on nations "weighted for their population sizes", the relationship of the one-to-one effect remains less significant.
  • This means that a small country like Macao cannot be equated with a highly populous one like China while studying the link between a shock and its economic impact.

 Key limitations in measuring global inequality:

• Macro-centred approach: Using inhibitive indicators like 'GDP per capita incomes' and 'GDP' that hardly reflect the true nature of inequities experienced by individuals or groups, both in and between nations.
  • For E.g. Deaton's study, like many other economists' studies on inequality done recently, do little to examine the distribution of income within countries.
  • Any such discourse on inequality and its measurement from the perspective of per-capita incomes alone says very little about the actual inequities that people experience and live with.

Way forward: Approaches to inequality studies.

• Need to incorporate a more 'inter-relational perspective in the development of a granular, meso-level approach to inequality studies (as argued by scholars like Amartya Sen and many others).
  • A relational, inter-subjective lens would help one understand how inequities persist and worsen almost like a continuum. 
  • Look at the differential access that individuals/groups have to economic resources, social opportunities, welfare-safety nets, etc. Widen the conceptual base by considering social aggregates of gender, class, caste, race and ethnicity.
  • Include income data sets for inequality analysis.