A Kuznets Approach to Analysing the Potential Impact of the COVID-19 Pandemic on Global Inequality

Abstract

This paper estimates the global Kuznets curve (2005-2020) by plotting global mean income against global inequality, while exploring COVID-19's impact on inequality. Using PPP adjusted GDP per capita and Gini index data from 122 countries (94% global GDP, 88% population), global income is simulated assuming lognormality. The paper finds that, at the pandemic outbreak, the world was on the downward part of the Kuznets curve. Compared to within-country inequality, between country inequality contributes significantly to global inequality. While the pandemic may temporarily decelerate the decline of global inequality, the long-term impact will be determined by the level of international cooperation in the global response to the pandemic.