The Impact of COVID-19 on Global Inequality and Poverty

The COVID-19 pandemic has had catastrophic economic and human consequences worldwide. Thispaper tries to quantify the consequences of the pandemic on global inequality and poverty in 2020. Since face-to-facehousehold survey data collection largely came to a halt during the pandemic, a combination of data sources is usedto estimate the impacts on poverty and inequality. This includes actual household survey data, where available,high-frequency phone surveys, and country-level estimates from the literature on the impact of the pandemic on povertyand inequality. The results suggest that the world in 2020 witnessed the largest increase to global inequality andpoverty since at least 1990. This paper estimates that COVID-19 increased the global Gini index by 0.7 point andglobal extreme poverty (using a poverty line of $2.15 per day) by 90 million people compared to counterfactual withoutthe pandemic. These findings are primarily driven by country-level shocks to average incomes and an increase ininequality between countries. Changes to inequality within countries were mixed and relatively modest.