Immunity-driven comparative advantage and its palliative effect on social health and inequality

Sugata Marjit, Gouranga G. Das and Mausumi Kar

Journal of Policy Modeling, 2025, vol. 47, issue 3, 607-632

Abstract: We propose a model of “trade” between high-income and low-income groups where the rich, fearing the spread of infection hires the poor for exposure-intensive outdoor activities as workers in the household industry. The greater the inequality, with social distancing and herd-immunity during Covid-19 pandemic, the more would be such inter-personal exchanges increasing demand for top-skilled and gig activities. The general equilibrium model and econometric estimation support this view offering policymakers insights to assess the impact of such gainful exchanges for improving wage inequality in the developing nations where informal sectors cushioned the income-inequality effects unlike the developed countries without informalization.

Keywords: Covid-19; Exposure-intensity; Health Policy; Wage; Herd-immunity; Comparative Advantage; General Equilibrium; 2SLS (search for similar items in EconPapers)
JEL-codes: D50 I18 J31 L80 N30 O10 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:47:y:2025:i:3:p:607-632

DOI: 10.1016/j.jpolmod.2025.01.008

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