Inequality in India Declined During COVID

Arpit Gupta, Anup Malani and Bartosz Woda

No 29597, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I15 O15 O53 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-lab
Note: DEV EH
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Citations: View citations in EconPapers (7)

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