Short and Long-Run Distributional Impacts of COVID-19 in Latin America
Resource type
Manuscript
Authors/contributors
- Lustig, Nora (Author)
- Martinez Pabon, Valentina (Author)
- Neidhöfer, Guido (Author)
Title
Short and Long-Run Distributional Impacts of COVID-19 in Latin America
Abstract
We simulate the short- and long-term distributional consequences of COVID-19 in the four largest
Latin American economies: Argentina, Brazil, Colombia and Mexico. We show that the shortterm impact on income inequality and poverty can be very significant, but that additional spending
on social assistance more than offsets the effect in Brazil. The offsetting effect is significant in
Argentina and Colombia, and nil in Mexico where there has been no such expansion. We find that
a universal basic income that would have produced the same reduction in the poverty gap as actual
policies would have cost slightly more but would have benefited the poor (the nonpoor) slightly
less (more). To project the long-term consequences, we estimate the impact of the pandemic on
school achievement and its intergenerational persistence. We use information on school closures,
educational mitigation policies, and account for educational losses related to health shocks and
parental job loss. Our findings show that in all four countries the impact is strongly asymmetric
and affects particularly the high-school completion rates of children from disadvantaged families.
Our simulations suggest that mitigation policies seem to have a minor impact on containing these
negative effects.
Place
Tulane Economics Working Paper Series
Date
2021
Accessed
25/08/2022, 18:32
Citation
Lustig, N., Martinez Pabon, V., & Neidhöfer, G. (2021). Short and Long-Run Distributional Impacts of COVID-19 in Latin America. http://repec.tulane.edu/RePEc/pdf/tul2013.pdf
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