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Inequality in Life and Death

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  • Rebelo, Sérgio
  • Eichenbaum, Martin
  • Trabandt, Mathias

Abstract

We argue that the Covid epidemic disproportionately affected the economic well-being and health of poor people. To disentangle the forces that generated this outcome, we construct a model that is consistent with the heterogeneous impact of the Covid recession on low- and high-income people. According to our model, two thirds of the inequality in Covid deaths reflect pre-existing inequality in comorbidity rates and access to quality health care. The remaining third, stems from the fact that low-income people work in occupations where the risk of infection is high. Our model also implies that the rise in income inequality generated by the Covid epidemic reflects the nature of the goods that low-income people produce. Finally, we assess the health-income trade-offs associated with fiscal transfers to the poor and mandatory containment policies.

Suggested Citation

  • Rebelo, Sérgio & Eichenbaum, Martin & Trabandt, Mathias, 2021. "Inequality in Life and Death," CEPR Discussion Papers 16366, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16366
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    Cited by:

    1. Almås, Ingvild & Bold, Tessa & von Carnap, Tillmann & Ghisolfi, Selene & Sandefur, Justin, 2023. "The macroeconomics of pandemics around the world: Lives versus livelihoods revisited," Journal of Development Economics, Elsevier, vol. 163(C).
    2. Gonzalez-Eiras, Martín & Niepelt, Dirk, 2022. "The political economy of early COVID-19 interventions in US states," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
    3. Eichenbaum, Martin S. & Rebelo, Sergio & Trabandt, Mathias, 2022. "The macroeconomics of testing and quarantining," Journal of Economic Dynamics and Control, Elsevier, vol. 138(C).
    4. Ascari, Guido & Colciago, Andrea & Silvestrini, Riccardo, 2023. "Business dynamism, sectoral reallocation and productivity in a pandemic," European Economic Review, Elsevier, vol. 156(C).
    5. Johnna Montgomerie, 2023. "COVID Keynesianism: locating inequality in the Anglo-American crisis response," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(1), pages 211-223.
    6. Stankov, Petar, 2024. "Will voters polarize over pandemic restrictions? Theory and evidence from COVID-19," Economic Modelling, Elsevier, vol. 136(C).
    7. Hevia, Constantino & Macera, Manuel & Neumeyer, Pablo Andrés, 2022. "Covid-19 in unequal societies," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
    8. Goldfayn-Frank, Olga & Lewis, Vivien & Wehrhöfer, Nils, 2022. "Spending effects of child-related fiscal transfers," Discussion Papers 26/2022, Deutsche Bundesbank.

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    More about this item

    Keywords

    Epidemic; Inequality; Recession;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • I1 - Health, Education, and Welfare - - Health
    • H0 - Public Economics - - General

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