How are inequalities changing as a consequence of the coronavirus crisis? What are the big challenges that await us in the world of tomorrow? What can be done to tackle inequalities in the future? Five renowned scholars gave their perspectives on these crucial questions in a special policy session of the ZEW research seminar series, held online on 19 June 2020 with almost 300 participants from all parts of the world.

The ZEW Research Seminar on Covid-19 and economic and social inequality was attended by 300 participants worldwide.
The five female and male scientists discussed the global impact of the coronavirus on economic and social inequality.

The virtual event was organized by ZEW Mannheim in cooperation with Università Cattolica del Sacro Cuore di Milano (UniCatt) and the Society for the Study of Economic Inequality (ECINEQ). It comprised five individual flash talks, followed by lively discussions with the participants.

COVID-19, the Big Divide?

The first talk was delivered by Stephen Jenkins, professor of economic and social policy at the London School of Economics and president-elect of the Society for the Study of Economic Inequality. Jenkins talked about the effects of COVID-19 on health and income inequalities in the UK. He described the COVID-19 pandemic effects as like “the Great recession at quadruple speed” and providing many grounds for pessimism, though he also said that it might possibly “generate collective will for progressive policy change”. Daniele Checchi, professor of economics at the Università Statale di Milano and director of DG Research at the Italian Social Security Institute, used real-time data to show that the COVID-19 pandemic created an asymmetric shock across regions and sectors in Italy, and discussed the policies put in place to mitigate these adversities. In his talk, Mariano Tommasi, professor of economics and director of the Center of Studies for Human Development at Universidad de San Andres in Buenos Aires, discussed the impact of the pandemic on the poor and vulnerable in developing countries, particularly in Latin America. He explained how these effects are particularly strong in a context of high informality rates and low social security coverage.

Michèle Tertilt, professor of economics at the University of Mannheim and winner of the 2019 Gottfried Wilhelm Leibniz Prize of the German Research Foundation (DFG), presented her latest results on the impact of COVID-19 on gender inequality. As her findings highlight – contrary to previous recessions – women have been much more affected than men by job losses and childcare obligations due to prolonged school and care facility closures in the current COVID-19 crisis. Finally, Miles Corak, professor of economics at the City University of New York and senior scholar at the Stone Center for Economic Inequality, traced the potential effects of the pandemic on future generations. He argued that the unequal impact of the pandemic on our society shows that “COVID-19 is not the great leveller, it’s the great revealer”, and offered an opportunity-enhancing menu for public policies to reduce the impact of the pandemic.

Rising inequalities call for targeted social policies

The speakers described how the coronavirus crisis exacerbates pre-existing inequalities in health, labour market outcomes, and living conditions across socio-economic and demographic groups. They all raised concerns about the long-term effects of COVID-19, for instance on social mobility and equal opportunities, as many dimensions of inequality are likely to increase further in the next months. Nonetheless, reasons for a more optimistic outlook on inequality in the long term were also highlighted. In some countries, the social security systems cushioned job losses, at least in the short run, while evidence from the UK shows that risk-pooling within households helps compensating individual income losses. Furthermore, the current crisis has spurred various forms of solidarity, and the increase in flexible work arrangements, which led fathers to take over more childcare in some families, could contribute to changing gender norms. Even though the crisis certainly reveals long-lasting problems, it could also be a chance to redesign social policies to tackle poverty and inequality.

The feedback from the audience was extremely positive. A total of 269 participants from all around the world followed the virtual event and actively participated by raising many interesting questions. The speakers, who came from five different countries in four different time zones, and the three organizers, ZEW labour market economists Dr. Sarra Ben Yahmed and Dr. Guido Neidhöfer as well as UniCatt professor and ZEW Research Associate Lorenzo Cappellari, will use the input from this diverse and fruitful exchange for their future co-operation.

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