Chief Economists Panel: Addressing inequality and poverty under COVID-19

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00:28 The channels

00:29 uh

00:30 through which

00:31 inequality has increased

00:34 are

00:35 varied,

00:36 um,

00:36 for countries where

00:39 the,

00:39 uh,

00:40 a significant share.

00:42 Of the labor force is in informal markets.

00:46 This is,

00:46 of course,

00:47 the area where

00:49 any kind of,

00:50 of

00:51 safety net is,

00:52 is,

00:53 is weakest.

00:54 Food vulnerability

00:56 which

00:56 disproportionately impacts

00:59 the poor

01:01 is another mechanism through which inequality is worsening.

01:22 And whether it's for the US or,

01:24 or Europe or the advanced economies,

01:27 uh,

01:27 teleworking was a practice which was

01:30 far more widespread among higher skilled workers

01:34 than medium or low-skilled ones.

01:37 Um,

01:37 it's close to 50% for high-skilled workers.

01:40 It was only a third for the low-skilled ones.

01:52 This pandemic has

01:55 Affected,

01:56 uh,

01:57 education in a way that has never happened in in previous crises,

02:00 and you have a loss of human capital.

02:02 This is not a

02:03 deferral that countries that,

02:04 that students are taking,

02:05 but this is actually a lost year of learning.

02:08 Uh,

02:08 and that has a big effect on human,

02:10 uh,

02:10 capital,

02:11 and we know that every year of schooling

02:14 matters for

02:15 the income that you make in a very significant way.

02:27 The young and the women have also been particularly hit

02:31 because non-standard forms of contracts are

02:34 more prevalent among these two categories.

02:37 And as you know,

02:39 women are more than 2 times more likely to work part-time than men.

02:43 Part-time employees also tend to be among the first to lose their job.

02:57 I think the bottom line is that

02:59 fiscal policy will have to be really

03:03 Absolutely central to dealing with this crisis

03:06 because

03:07 it's not going to be more a liquidity crisis as this goes forward.

03:10 It's going to be a solvency crisis.

03:13 Fiscal support will be needed to address

03:15 these,

03:16 uh,

03:16 issues of just maintaining livelihoods,

03:18 but also,

03:19 you know,

03:19 preventing

03:20 big gaping holes in,

03:21 uh,

03:21 in inequality and big increases in poverty.

03:25 And lastly,

03:25 I will say moving beyond the DSSI and moving beyond the emergency finance.

03:31 What the international community,

03:33 uh,

03:34 can do is try to facilitate faster,

03:38 uh,

03:38 and more equitable,

03:40 equitable restructurings,

03:42 um,

03:44 where possible,

03:45 uh,

03:46 to,

03:47 you know,

03:48 Help countries move beyond the debt overhang,

03:51 uh,

03:52 and you know,

03:53 all the associated,

03:54 uh,

03:55 problems with,

03:56 with inequality,

03:57 poverty,

03:58 and,

03:58 and,

03:59 uh,

03:59 just general rebuilding.

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The channels uh through which inequality has increased are varied, um, for countries where the, uh, a significant share. Of the labor force is in informal markets. This is, of course, the area where any kind of, of safety net is, is, is weakest. Food vulnerability which disproportionately impacts the poor is another mechanism through which inequality is worsening. And whether it's for the US or, or Europe or the advanced economies, uh, teleworking was a practice which was far more widespread among higher skilled workers than medium or low-skilled ones. Um, it's close to 50% for high-skilled workers. It was only a third for the low-skilled ones. This pandemic has Affected, uh, education in a way that has never happened in in previous crises, and you have a loss of human capital. This is not a deferral that countries that, that students are taking, but this is actually a lost year of learning. Uh, and that has a big effect on human, uh, capital, and we know that every year of schooling matters for the income that you make in a very significant way. The young and the women have also been particularly hit because non-standard forms of contracts are more prevalent among these two categories. And as you know, women are more than 2 times more likely to work part-time than men. Part-time employees also tend to be among the first to lose their job. I think the bottom line is that fiscal policy will have to be really Absolutely central to dealing with this crisis because it's not going to be more a liquidity crisis as this goes forward. It's going to be a solvency crisis. Fiscal support will be needed to address these, uh, issues of just maintaining livelihoods, but also, you know, preventing big gaping holes in, uh, in inequality and big increases in poverty. And lastly, I will say moving beyond the DSSI and moving beyond the emergency finance. What the international community, uh, can do is try to facilitate faster, uh, and more equitable, equitable restructurings, um, where possible, uh, to, you know, Help countries move beyond the debt overhang, uh, and you know, all the associated, uh, problems with, with inequality, poverty, and, and, uh, just general rebuilding.

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Three Chief Economists FINAL2

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