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COVID-19 became a global health emergency when it threatened the catastrophic collapse of health systems as demand for health goods and services and their relative prices surged. Governments responded with lockdowns and increases in transfers. Empirical evidence shows that lockdowns and healthcare saturation contribute to explain the cross-country variation in GDP drops even after controlling for COVID-19 cases and mortality. We explain this output-pandemia tradeoff as resulting from a shock to subsistence health demand that is larger at higher capital utilization in a model with entrepreneurs and workers. The health system moves closer to saturation as the gap between supply and subsistence narrows, which worsens consumption and income inequality. An externality distorts utilization because firms do not internalize that lower utilization relaxes healthcare saturation. The optimal...

This research assesses how low-income households in rural Kenya coped with the immediate economic consequences of the COVID-19 pandemic. It uses granular financial data from weekly household interviews covering six weeks before the first case was detected in Kenya to five weeks after during which various containment measures were implemented. Based on household-level fixed-effects regressions, our results suggest that income from work decreased with almost one-third and income from gifts and remittances reduced by more than one-third after the start of the pandemic. Nevertheless, household expenditures on food remained at pre-COVID levels. We do not find evidence that households coped with reduced income through increased borrowing, selling assets or withdrawing savings. Instead, they gave out less gifts and remittances themselves, lent less money to others and postponed loan...

In early 2020, the unprecedented nature of COVID-19 prompted India, among many other countries, to put in place stark measures to stem the virus’ spread and the cost of human lives. We analyze data from phone-based surveys on disruptions to agricultural production and food security, administered with 1515 smallholder producers in the states of Haryana and Odisha. We find substantial heterogeneity in how the lockdown affected farmers in these two states, which is likely related to existing structural differences in market infrastructure and to differences in state-specific COVID-related policies. In Odisha, where mechanization is limited, farmers spent more on labor to harvest their crops, and distress selling was more prevalent due to the absence of a well-functioning procurement system for their crops. In Haryana, preexisting market infrastructure allowed the state to sustain...

Many countries are shutting non-essential sectors of the economy to slow the spread of Covid-19. Older individuals have most to gain from slowing virus diffusion. Younger workers in sectors that are shuttered have the most to lose. In this paper we extend a standard epidemiological model of disease progression to include heterogeneity by age, and multiple sources of disease transmission. We then incorporate the epidemiological block into a multisector economic model in which workers differ by sector (basic and luxury) as well as by health status. We study optimal mitigation policies of a utilitarian government that can redistribute resources across individuals, but where such redistribution is costly. We show that optimal redistribution and mitigation policies interact, and reflect a compromise between the strongly diverging preferred policy paths across the subgroups of the population

We nowcast the economic effects of the Covid-19 pandemic and related lockdown measures in the UK and then analyse the distributional and budgetary effects of the estimated individual income shocks, distinguishing between the effects of automatic stabilisers and those of the emergency policy responses. Under conservative assumptions about the exit strategy and recovery phase, we predict that the rescue package will increase the cost of the crisis for the public budget by an additional £26 billion, totalling over £60 billion. However, it will allow to contain the reduction in the average household disposable income to 1 percentage point, and will reduce poverty rate by 1.1 percentage points (at a constant poverty line), with respect to the pre-Covid situation. We also show that this progressive effect is due to the increased generosity of Universal Credit, which accounts for only 20%...

Pandemics have historically had a significant impact on economic inequality. However, official inequality statistics are only available at low frequency and with considerable delay, which challenges policymakers in their objective to mitigate inequality and fine-tune public policies. We show that using data from bank records it is possible to measure economic inequality at high frequency. The approach proposed in this paper allows measuring, timely and accurately, the impact on inequality of fast-unfolding crises, like the COVID-19 pandemic. Applying this approach to data from a representative sample of over three million residents of Spain we find that, absent government intervention, inequality would have increased by almost 30% in just one month. The granularity of the data allows analyzing with great detail the sources of the increases in inequality. In the Spanish case we find...

The impact of the COVID-19 pandemic in Mexico City has been sharp, as several social inequalities coexist with chronic comorbidities. Here, we conducted an in-depth evaluation of the impact of social, municipal, and individual factors on the COVID-19 pandemic in working-age population living in Mexico City. To this end, we used data from the National Epidemiological Surveillance System; furthermore, we used a multidimensional metric, the social lag index (DISLI), to evaluate its interaction with mean urban population density (MUPD) and its impact on COVID-19 rates. Influence DISLI and MUPD on the effect of vehicular mobility policies on COVID-19 rates were also tested. Finally, we assessed the influence of MUPD and DISLI on discrepancies of COVID-19 and non-COVID-19 excess mortality compared with death certificates from the General Civil Registry. We detected vulnerable groups who...

COVID-19 may spread rapidly in densely populated urban informal settlements. Kenya swiftly implemented mitigation policies; we assess the economic, social and health-related harm disproportionately impacting women. A prospective longitudinal cohort study with repeated mobile phone surveys in April, May and June 2020. 2009 households across five informal settlements in Nairobi, sampled from two previously interviewed cohorts. Outcomes include food insecurity, risk of household violence and forgoing necessary health services due to the pandemic. Gender-stratified linear probability regression models were constructed to determine the factors associated with these outcomes. By May, more women than men reported adverse effects of COVID-19 mitigation policies on their lives. Women were 6 percentage points more likely to skip a meal versus men (coefficient: 0.055; 95% CI 0.016 to 0.094),...

Heterogeneity in COVID-19 morbidity and mortality is often associated with a country’s health-services structure and social inequality. This study aimed to characterize social inequalities in COVID-19 mortality in São Paulo, the most populous city in Brazil and Latin America. We conducted a population-based study, including COVID-19 deaths among São Paulo residents from March to September 2020. Age-standardized mortality rates and unadjusted rate ratios (RRs) [with corresponding 95% confidence intervals (CIs)] were estimated by race, sex, age group, district of residence, household crowding, educational attainment, income level and percentage of households in subnormal areas in each district. Time trends in mortality were assessed using the Joinpoint model. Males presented an 84% increase in COVID-19 mortality compared with females (RR = 1.84, 95% CI 1.79-1.90). Higher mortality...