COVID-19 in the US: Poverty and wage inequality effects by race, gender and education

We study the wage vulnerability to the stay-at-home orders and social distancing measures imposed to prevent COVID-19 contagion in the US by education, race, gender, and state. Under 2 months of lockdown plus 10 months of partial functioning we find that both wage inequality and poverty increase in the US for all social groups and states. For the whole country, we estimate an increase in inequality of 4.1 Gini points and of 9.7 percentage points for poverty, with uneven increases by race, gender, and education. The restrictions imposed to curb the spread of the pandemic produce a double process of divergence: both inequality within and between social groups increase, with education accounting for the largest part of the rise in inequality between groups. We also find that education level differences impact wage poverty risk more than differences by race or gender, making lower-educated groups the most vulnerable across all social dimensions. When measuring mobility as the percentile rank change, most women with secondary education or higher move up, while most men without higher education suffer downward mobility. Our findings can inform public policy aiming to address the economic shock of the pandemic over the most vulnerable socioeconomic groups in society.

 

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