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Death and Destitution: The global distribution of welfare losses from the COVID-19 pandemic

Author

Listed:
  • Francisco H. G. Ferreira

    (London School of Economics and IZA)

  • Olivier Sterck

    (University of Oxford)

  • Daniel Mahler

    (World Bank)

  • Benoit Decerf

    (World Bank)

Abstract
The Covid-19 pandemic has brought about massive declines in wellbeing around the world. This paper seeks to quantify and compare two important components of those losses – increased mortality and higher poverty – using years of human life as a common metric. We estimate that almost 20 million life-years were lost to Covid-19 by December 2020. Over the same period and by the most conservative definition, over 120 million additional years were spent in poverty because of the pandemic. The mortality burden, whether estimated in lives or in years of life lost, increases sharply with GDP per capita. The poverty burden, on the contrary, declines with per capita national incomes when a constant absolute poverty line is used, or is uncorrelated with national incomes when a more relative approach is taken to poverty lines. In both cases the poverty burden of the pandemic, relative to the mortality burden, is much higher for poor countries. The distribution of aggregate welfare losses – combining mortality and poverty and expressed in terms of life-years – depends both on the choice of poverty line(s) and on the relative weights placed on mortality and poverty. With a constant absolute poverty line and a relatively low welfare weight on mortality, poorer countries are found to bear a greater welfare loss from the pandemic. When poverty lines are set differently for poor, middle and high-income countries and/or a greater welfare weight is placed on mortality, upper-middle and rich countries suffer the most.

Suggested Citation

  • Francisco H. G. Ferreira & Olivier Sterck & Daniel Mahler & Benoit Decerf, 2021. "Death and Destitution: The global distribution of welfare losses from the COVID-19 pandemic," Working Papers 581, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2021-581
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2021-581.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Gallardo, Mauricio, 2022. "Measuring vulnerability to multidimensional poverty with Bayesian network classifiers," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 492-512.
    2. Luísa Nazareno & Juliana Castro Galvao, 2023. "The Impact of Conditional Cash Transfers on Poverty, Inequality, and Employment During COVID-19: A Case Study from Brazil," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(2), pages 1-30, April.
    3. Gigi Foster & Paul Frijters, 2024. "Hiding the elephant: The tragedy of COVID policy and its economist apologists," Australian Economic Papers, Wiley Blackwell, vol. 63(1), pages 106-144, March.
    4. Decerf,Benoit Marie A, 2022. "Normative Indicators Combining Poverty and Mortality : A Survey," Policy Research Working Paper Series 10042, The World Bank.
    5. Joe Piacentini & Harley Frazis & Peter B. Meyer & Michael Schultz & Leo Sveikauskas, 2022. "The Impact of COVID-19 on Labor Markets and Inequality," Economic Working Papers 551, Bureau of Labor Statistics.
    6. James White McAuley & Paul W. Nesbitt-Larking, 2022. "Imagining the Post-COVID-19 Polity: Narratives of Possible Futures," Social Sciences, MDPI, vol. 11(8), pages 1-19, August.
    7. Brata, Aloysius Gunadi & Triandaru, Sigit & Patnasari, Yenny & Setyastuti, Rini & Sutarta, Agustinus Edi & Sukamto, Andreas, 2022. "The Spanish Flu Pandemic and Income Distribution in Java: Lessons from the 1920s," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(3), pages 103-117.
    8. Nora Lustig & Valentina Martinez Pabon & Guido Neidhöfer & Mariano Tommasi, 2020. "Short and Long-Run Distributional Impacts of COVID-19 in Latin America," Working Papers 2013, Tulane University, Department of Economics.
    9. Narayan,Ambar & Cojocaru,Alexandru & Agrawal,Sarthak & Bundervoet,Tom & Davalos,Maria Eugenia & Garcia,Natalia & Lakner,Christoph & Mahler,Daniel Gerszon & Montalva Talledo,Veronica Sonia & Ten,Andrey, 2022. "COVID-19 and Economic Inequality : Short-Term Impacts with Long-Term Consequences," Policy Research Working Paper Series 9902, The World Bank.
    10. Balisacan, Arsenio M. & dela Cruz, Russel Matthew M., 2021. "When a Pandemic Strikes: Balancing Health and Economy toward Sustainable and Inclusive Recovery," MPRA Paper 111259, University Library of Munich, Germany.
    11. Stephen Malpezzi, 2021. "Housing “Affordability” and Responses During Times of Stress: A Brief Global Review," GRU Working Paper Series GRU_2021_011, City University of Hong Kong, Department of Economics and Finance, Global Research Unit.

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    More about this item

    Keywords

    COVID-19; pandemic; welfare; poverty; mortality; global distribution;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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