The unequal impact of the coronavirus pandemic: Evidence from seventeen developing countries

Abstract

The current coronavirus pandemic is an unprecedented public health challenge that is having a devastating economic impact on households. Using a sample of 230,540 respondents to an online survey from 17 countries in Latin America and the Caribbean, the study shows that the economic impacts are large and unequal: 45 percent of respondents report that a household member has lost their job and, among households owning small businesses, 59 percent of respondents report that a household member has closed their business. Among households with the lowest income prior to the pandemic, 71 percent report that a household member lost their job and 61 percent report that a household member has closed their business. Declines in food security and health are among the disproportionate impacts. The findings provide evidence that the current public health crisis will exacerbate economic inequality and provides some of the first estimates of the impact of the pandemic on the labor market and well-being in developing countries.

Fig 1. Higher rates of job loss and business closure among households in the lowest income group.

Point estimates and 95 percent confidence intervals for regressing the labor market outcome on income bin indicators and country fixed effects. Data is weighted using within- and cross-country weights. See Empirical Methods in the Supplementary Information section for details.

Fig 2. Higher rates of livelihood loss in countries with higher informality.

Each dot represents the share of respondents who report that a household member lost a job or closed a business. Data is weighted using within- and cross-country weights. See Empirical Methods in the Supplementary Information section for details.

Fig 3. The share of households in the bottom part of the income distribution is expected to increase.

Shares of households in each income bin for incomes reported for January 2020 and April 2020. Data counts weighted using within- and cross-country weights. See Empirical Methods in the Supplementary Information section for details.

Fig 4. Support for extending lockdown policies declines more among households that lost their livelihoods.

Point estimates and 95 percent confidence intervals for the share of respondents supporting extending lockdown policies in relation to the number of days since the first COVID-19 case in the country. Data is weighted using within- and cross-country weights. See the Empirical Methods in the Supplementary Information section for details.