Insights Blog

Economists Weigh In On Covid-19 And Inequality

March 23, 2021
Economists Weigh In On Covid-19 And Inequality Photo: Koji Yamada

In a presentation to the Pajara Valley Saves Lives Coalition, SCEPA Director Teresa Ghilarducci describes how Covid-19 is accelerating gaps in race, income and gender inequality and has created new ones in employment, education, and life expectancy. See the full presentation here


Economists describe inequality of job loss as a K-shaped recession. In a K-shaped recession, the top segment of society climbs back upward while another segment continues to suffer.  A graph of economic growth in this scenario would resemble two diverging diagonal lines of the letter "K." Peter Atwater at The College of William and Mary calls a K-shaped recovery, “Stacked inequity on one side and stacked privilege on the other”

As a result of the pandemic recession, employment gains experienced by non-white workers from 2009- 2019 nearly disappeared. Recessions force out marginal workers first, often called “last in-first out,” or LIFO. The Federal Reserve’s study of previous recessions show non-white workers and women lose more jobs as a share of their employment than white men in recessions. 

The Covid recession was even harsher on women, as so many had to leave the labor market in order to perform care work for their parents, children, other family members or all of the above. Ghilarducci points out the sad label given to the Covid-19 recession, the “she-cession.”  Additionally, women lost more jobs than men in the Covid-19 recession. To bring women back to the labor market and recover their losses, she argues for expanding school days and a more equal division of care work between genders.


Covid-19 policies caused deep inequalities at school. The effects of school closures during the Covid-19 pandemic was studied by researchers from the University of Pennsylvania, Yale, and Northwestern. Students from poor neighborhoods suffer great losses, whereas children from rich neighborhoods remain unscathed. Differences in the quality of schools, the income levels of peers, and how equipped parents are to help all contribute to growing educational inequality during the pandemic. Ghilarducci says, if schools had to be closed, we could have considered supplying extra resources to the children of essential workers, as well as compensating schools more in lower income areas based on their needs. 

Life Expectancy 

Researchers found Covid-19 will reduce U.S. life expectancy in 2020 by 1.13 years, but Black and Latino populations are estimated to see life expectancy rates decrease by 3 to 4 times that of whites. Theresa Andrasfay and Noreen Goldman from the University of Southern California and Princeton University report that Covid-19 caused a disproportionate number of deaths among the Black and Latino populations. According to Rogelio Sáenz at the University of Texas at San Antonio and Marc A. Garcia at the University of Nebraska - Lincoln, “Covid-19 is expected to reverse over 10 years of progress made in closing the Black−White gap in life expectancy and reduce the previous Latino mortality advantage by over 70%.” 

Life expectancy is expected to continue dropping due to persisting Covid-19 mortality and the long-term health, political, social, and economic impacts of the pandemic. For example, survivors suffering lasting effects from the virus can face disabilities, including long-term neurological disability that requires expensive medical care.


Ghilarducci notes that some policies implemented in response to the pandemic were beneficial, such as moratoriums on evictions that saved lives and helped stem inequality. “Housing precarity policies that prevent eviction and utility disconnections have been effective mechanisms for decreasing both Covid-19 infections and deaths,” according to five Duke researchers. However, these could have been more effective if implemented nationwide. If a federal eviction moratorium had been in place from early March 2020 through the end of November 2020, Covid-19 infections would have decreased by 14.2% and deaths by 40.7%. Utility disconnection moratoriums would have reduced Covid-19 infections rates by 8.7% and deaths by 14.8%. 


Wealth inequality was reduced due to lower-income people using their stimulus checks to pay off debt. The New York Federal Reserve found that people who are non-white, without a college degree, in lower-income households, and in households experiencing negative employment shocks or income drops since the start of the pandemic are more likely to use substantially larger shares of their economic impact payments to pay down debt.