 The title of today's webinar is The Impact of the Economic Crisis Caused by COVID-19 on poverty and inequality. You're still learning about the massive economic crisis generated by COVID-19. And one of the most pressing policy concerns is the implication of COVID-19 on poverty and inequality in the global south. The reasons expect that within-country inequality has increased. As most vulnerable workers, especially in informal employment, have been badly affected by the pandemic and government lockdown policies. It is less clear what might have happened to across-country inequality. May also increase as East Asia starts recovering faster than other developing regions. It's also the case that richer countries have shown some of the sharpest income decrease. However, much of the discussion that we have had on poverty and inequality has been speculative. And the evidence-based implication of the pandemic on inequality remains weak as of today. So in today's webinar, we have privileged to have one of the leading thinkers on global inequality, as is the likely impact of the pandemic on national and global inequality. You're also fortunate to have a distinguished discussant for the policy world to share insights in the policy implications of impact of COVID-19 on inequality and what the international development community can do in this respect. Now let me introduce the speaker and the discussant. Speaker is Professor Phanser Mourgenon, the Emeritus Professor of Economics at the Paris School of Economics. He is the director of the Paris School of Economics on 2007-2013. Before that, he was chief economist and senior vice president of the World Bank. Phanser is one of the seminal thinkers in developing economics, and has made many important contributions on research and poverty and inequality. He also has a long association with WIDER. He was a member of WIDER's advisory board from 2001-2008. It's a pleasure to invite Phanser back to our WIDER unit. Now let me introduce the discussant, Mattua Roig. Mattua is the chief of the emerging issues and trans-section of the Division of Inclusive Social Development of the UN Department of Economic and Social Affairs. Mattua has over 20 years experience in conducting policy research and analysis, leading to inequality, employment, international migration, and the link to development. So it's a pleasure also to have Mattua here as a discussant. Now I'd like to invite Phanser to present his keynote. Right over to you. Okay, thank you very much, Kunal. Thank you very much to WIDER and to you for inviting me to this webinar. I should say, I would say normally it's a pleasure to be back to WIDER and I'm really simply sorry that I am on my chair in my apartment in Paris rather than in a conference room in Helsinki. But this is our life is these days. Okay, so the topic for this presentation is about COVID-19 and the impact of that crisis we are going through for the last 12 months on inequality. And the way in which this crisis may have increased or exacerbate existing inequalities or created new inequality. Now, this presentation has been entitled some first reflections, first basically because it is certainly too early to say very much on the impact of the crisis on inequality. And we lack the data necessary to make any precise study of that impact. And hopefully in the coming year, we will have more information and it will be possible to get to more definitive conclusions about this decision. Instead of referring to a specific topic like global inequality or poverty, I entitled this presentation some reflections basically because I would like to look at various dimensions of inequality. Inequality is not only income inequality, it is not only consumption of wealth inequality. It is not only inequality in front of health or in front of the death in front of a pandemic. It is all this at the same time. I simply wanted to look at those various dimensions sequentially in order to get a full picture of the relationship between the crisis and inequality. So let me move on with the presentation. So, COVID-19 has been presented very often these days as both showcasing and exacerbating inequality. For various reasons. First, it is expected to hit harder people who are living in precarious conditions. And despite the fact that the policy measures may have dampened this effect. Second, the lockdown is likely to have affected more low income people with irregular jobs, very often informal workers, especially in the south, but also in the north. And this is contributing necessarily to inequality. At the global level, the global economic crisis, which has been the consequence of the pandemic, has increased global poverty without any doubt. And presumably, but we'll see that a little later may have contributed to more global inequality. And finally, the human capital loss in low income countries among precarious households like the effect of poverty, the effect of unemployment, the interruption in schooling will affect future inequality and this is something that we would like to also take into account. So to early to estimate all these effects, but one can speculate to what what they could be. And in particular, I think it is important to make clear the various dimensions we want to look at through which we want to look at the inequality and must say that I could not resist the making this a critique to the last report by Oxfam on the progress and and inequality. Because it is a typical, despite the fact that this report is providing very interesting information on inequality and the pandemic. There is also a very argument which I be, which I find very spacious, which is basically to say look, a lot of inequality because the 10 largest billionaires have been able to recover their fortune in nine months, when it will take a few years for to recover their initial level of income. But of course there is a complete confusion here between the price on stock markets and the fact that the day the months of pandemic struck stock markets crushed in more or less everywhere in the world. And then they went back to some level in some countries at the initial level in some other countries are not yet there. So, this is a complete confidence has nothing to do with the standard of living of the people with the consumption expenditure of the people. So, we should be really careful in when looking at inequality issues to make sure that we're talking about something which is well defined, and to have rigorous arguments. So my presentation will be about this very quickly on each of these issues in equality of casualties, what we can say, or an equal is the cost of the lockdown and the impact of compensating policies. What happened at the global level means global inequality. And finally, if you remarks on the likely legacy effects of the lockdown and the possible reversal in the downward global inequality trend that was observed over the last 20 years or so. And then the inequality of casualties across countries. The case is extremely clear. You have here map of the incidence of the pandemic. We know that it is very often very likely underestimated in many low income countries in particular in Sub-Saharan Africa. And if we're consistently estimated, it is, there is no doubt that the crisis has struck much more severely advanced countries than developing countries in general. And one of you there is definitely not an increase in inequality in the world and on the contrary. So, this is one aspect which needs to be to be emphasized. It is not clear that we cannot say anything about the future. There is this you already today saying that the pandemic is starting to hit seriously in Sub-Saharan Africa, which has been more or less isolated, which had not not been too much hit until until now. Within country, we have something which is quite different in the sense that we have little information on the socioeconomic status of the COVID victims, but what we can do is the same kind of geographical correlation. And if we look at the incidence of the pandemic in a country or in the city, we can try to look at the correlation between the socioeconomic status of areas in our sub districts in a urban area and to see whether there is correlation. On this picture here, what you have is the incidence of the pandemic, which are the red circles and the color of the various sub districts, sub world units in London area in UK, which are dark for low socioeconomic status as described by the proportion of so-called unsecured occupations, temporary contracts into jobs, self-employed people, or we would find exactly the same kind of correlation with poverty of children. And you see that there is a clear correlation. The virus hit much more strongly those parts of the London area with a low socioeconomic status. The priori is the same analysis could be done at the global level, but as we have seen, it would give exactly the opposite result, although some people do not completely agree with this statement. The previous correlation must be taken with care because we have to take into account what was the initial level of mortality and to see whether the virus increased mortality in a disproportionate way in some areas or for some socio-economic groups than for others. And this study by a Belgian economist, the Costa and colleagues, is showing that things are definitely not that easy, not that simple. On this chart, what you have at the top is the excess mortality, therefore, presumably due to the pandemic, for men and then women on the right, 65 and more. And this is by the size of the income of those people, 65 and more, in Belgium. Many of them, of course, will be retired people, but then it will be decided in terms of the pension that they receive. And this gives me the idea about the socio-economic group they were belonging to at the time they were acting. And here on the top is that you have a declining trend, not trend, you have a declining shape. And the meaning that rich people or rich socio-economic status are less affected by the COVID than poor ones. And from that point of view, you could say, oh, this is inequality. If you look at the bottom chart, the Peace Corps is defined as the excess mortality by the existing mortality as observed in previous years, as observed before 2020. And you see that the downward-slooping shape that is on the top graph is disappearing. It is now becoming something more or less horizontal, which means that mortality due to the pandemic is more or less proportional to the mortality of people 65 and more that we observe regularly. So depending on whether we want to look at inequality as related to health and the correlation between casualties and income in absolute terms or in relative terms, we will conclude that COVID has increased or has maintained inequality or has maintained the level of inequality where it was. So this example is important because it shows that things, conclusions are not that easy to make. The next topic I want to look at is how an equal the cost of the lockdown has been and what has been the impact of compensating policies in the countries. Now, the lockdown policies have been applied universally in advanced as much as in developing countries. Coupled with teleworking where it was possible with partial employment compensation, then it was maybe compensating compensated in terms of other formal employees were not so much affected by this lockdown. And the lockdown was really affecting, as I said before, much more the informal workers who could not leave their area, their residence area in order to go to work elsewhere in the city or basically where the demand for the services simply had stopped. So in all countries, and again, this is also true, but because informal sector is less important in advanced countries, there's still more true in developing countries, informal sector has been badly affected. And because of that we may expect that indeed there was an increase in inequality because we know that in that sector, the income are lower. Now in addition, we could say that those sectors have been more affected directly by the pandemic. Now we know that in many countries, some partial compensation was provided through ad hoc public cash transfer programs. And this may have compensated or at least partly compensated the direct impact of the economic crisis due to the lockdown and the pandemic. So as I said, it's too early to estimate the impact of the crisis, but with some micro simulation exercises and some very limited surveys we may try to say something about this impact. On this chart here you have a very simple proxy for the impact of the lockdown on inequality. This is taken from study by Richard Blundell and colleagues at IFS. And basically what they did, they looked at what they call the shutdown sectors, the sectors which were most affected by the shutdown, where activity went down because of the shutdown. And they looked at the deciles, this is what you have in the bottom left design graph, they look at the design to which people working in those shutdown sectors belong. And what you can see on this chart is that you have much less people belonging to the top decides working in those shutdown sectors and presumably affected by the shutdown, then you have low income people, people in the first decide working in those shutdown sectors. So because of that, we may expect that the day we will have the data, and this will come soon because in a country like the UK or other advanced countries, you have Liverpool surveys which are taken more or less every quarter. So we should very soon start having to have some information on this. But this is a proxy or a sign that inequality may have increased because of that. You also have some people who did some micro simulation, so they look at a sample of households before the crisis pre pandemic, and they tried to figure out what could be the change in the distribution of income in that population, due to the pandemic, based on GDP forecast, based on information on an employment and employment. They did what is called now casting. Basically they have some partial information about changes which have taken place in the population, in particular in terms of employment, and they they try to apply to the micro data. So those changes which were observed are estimated at the aggregate level. And most of these studies found that the lockdown led to a strong increase in income inequality. But it was almost completely compensated by cash transfer policies in advanced countries, and not only advanced countries, even in some emerging countries. Now the time dimension is important because we should look at what is going on within the year rather than the full year which is the standard time dimension of all these analyses but I'm not insisting on this. On the other hand, it is clear that these estimations are very precise but they give some all of magnitude and they tell us something about what may have happened. The following charts are taken from a study on Latin America by Nora Lustig, and I think these are quite interesting. The solid line represents the direct impact, a simulated impact of the lockdown on the distribution. So these come percentile by percentile. So we see if we look at Argentina for example that the top percentiles have been less affected by the lockdown than the bottom percentile. This is what we're expecting when we know that the informal sector was more affected. And the dotted line would correspond to the impact of the crisis of the lockdown after compensation through the transfer policies in those countries. And you can see that in Argentina and Brazil for example, poverty has gone down, the impact on poverty has been reverted because of those policies may have been reverted I should say, because of course this is our simulation. And the inequality if we look at the case of Brazil has gone down rather than gone up. As a matter of fact when we look at the solid line, it is difficult to say because we see that both the very bottom part of the distribution and the top part of the distribution were less hit by less affected by the crisis than the others. So this I think is an interesting conclusion. Finally, if we look at a few adult panels survey which are available, we have something which is quite interesting. The come here survey has been a survey which for any other reasons started in January 2020. And then was taken in May again, and in September again. Same people, it is a panel survey. Five countries, 1600 individuals in every country, France, Germany, Italy, Spain, Sweden. And this is on average for all those. If we put the five samples together for the whole seven for the eight, eight thousand people, what we find is this evolution in equality increased in May, just after the lockdown or just at the middle of the lockdown in many countries. So definitely the lockdown had an inequality impact on the distribution, but by September. Okay, this is telling me that I should stop very, very shortly. But in September inequality had gone down, simply because compensating policies came out and made equalized the distribution at that time. I must say that I would be surprised by that, that the inequality went down, but probably will have to work more on this, but this basically say that the impact is not as simple as one could think. And also I want to mention a study on Bangladesh by same rain and the colleagues, they re interviewed people would be interviewed in by their research center in 2018. They only were able to get 5000 households or there was a nutrition of the initial panel but by 37%, but you had still more than 50% being people being interviewed. And what they found in that case is a surge in poverty, of course, this is what we know, but they observe a noticeable increase in inequality. More or less everybody was very much affected even the top decides, we are very much affected by the lockdown, less 30% drop in consumption expenditures, but the top was less affected, definitely than the bottom. And definitely there was there an increase in inequality, and this was taking into account of course the compensating policies. Now, a few words about because I'm in a hurry, let me go directly to what we can say about the COVID crisis and global income inequality. So I'll go directly to those charts, which I have done, I mean, based on calculation which I have done for this presentation. And that simply I looked at took some previous estimates of the evolution of the global inequality that I have worked on for many time had this book several years ago which was basically about about which was partly about this. And I tried to figure out what would be the impact of the crisis by using the GDP per capita forecast by the IMF. Some of them from January some other from last October and trying to see okay what has been the impact and what has been the evolution of inequality. And if we simply say that we take those figures of GDP per capita growth, we apply them to the data that we had for 2018, 19, etc. And then we see what is the resulting distribution of income within the world. This is taking into account both inequality between countries and inequality within country, except for the fact that because I didn't have any data to do that, I kept the inequality within country constant. And so there is something missing here. We are basically looking at only the impact of the between inequality change on the global inequality among old world cities and. But something is missing because we don't have the unique change in within country and equality yet. And what you can see in the circles is the evolution we see that the trend that the downward trend that we have in is essentially flattening in 2019, 2020. And if instead of comparing to the previous year, we compare to what would have been implications of continuing the growth trends observed in every country in the world from 29 to 2020. And then this is a dotted line and you see that the actual change in inequality is a different between what may what we may observe, which is the solid line. And what we could have observed if growth had remained the same in all countries. And we see there that definitely there's been an increase in inequality with respect to this counterfactual about the growth trend. And inequality basically remain constant, didn't increase remain constant. If we look at the comparison between 2019 and 2020. This is more or less in agreement with some results that Angus Deaton got doing the same kind of exercise lately, you find more or less the same thing. And that is measuring the impact of the crisis by looking at the difference between the forecast by the IMF of growth in 2020 as released in January to the forecast, which we have made a year ago before the pandemic. And then he said the difference in the forecast is telling us something about what has been the impact of the pandemic. And this is something very similar to what we have here. Okay, so let me conclude very quickly. And this is the last point. What is the likely legacy on the crisis. And the reason why I believe that maybe we're going toward the reversal of these downward global inequality trend that you have just seen on the previous chart. And the legacy effect include the consequences of a severe increase in poverty in many countries of the world and especially in the south, of course, the loss of human capital, due to the increase in poverty and the fact that there was some health problems the health of the population certainly has been affected by the increase in poverty, loss of human capital through the interruption of schools, huge increase in dropouts in many countries. And we know that many people who have not gone to school for six months probably will never go back to school. So we truly have dropouts and the impact of that would be felt for a very long time. And finally, the increase in the indebtedness of Sub-Saharan Africa. We knew this was already a big issue before the pandemic. Now those countries has had to borrow a little more during the pandemic during 2020, and the increases of the debt has been more or less 10% of GDP. And this means that one way or another, this debt is not sustainable. So we have to be done, but most likely some the growth will slow down in those countries because there will be some package some changes in policy that will be producing that chain. So all these factors will probably produce a slowdown in the growth of those countries. And because of that, it's maybe the case that for at least a couple of years, the global trend that we have seen for the equalizing of the global income might stop and we might go toward reversal and toward an increase in global inequality because the poorest country in the world will be affected for some time for some durability in the affection. I mean, in the way in which those countries will be affected and this is something which believe we must be prepared. And because of that, the main conclusion that I would get from all these we said that the help that should come from that help us to come from the global development community, especially in terms of the debt, something has to be done. It is not clear what what can be done and the situation is slightly more complicated than in the 90s in the late 90s. At the time of the hippie initiative with which reduce the debt of low income countries. So what the G7 or the G20 can do is something really quite important. We have to go beyond simply a stopping or a moratorium on the debt service. We need to really to get to reduce the debt, and this will take some time as we as we know. The other thing on which we need to have a community aid coming from the development community is of course about vaccination. And I will finish on this, as I said at the beginning, we don't know what will happen with the pandemic in particular in Southern Africa. It may be the case that and we have some signs today that the situation is worsening in several countries. Because of that, it is very urgent for vaccination to become available in those countries. And we know that today, those countries will have to would have to wait one year before really some significant vaccination program would start. So what could be done about this. This is something that was completely ignored until now. And I think that this should become a priority in the global dialogue about the development that will take place in the coming weeks, I think so. And I will stop here. I've been sorry about this. Thank you so much. It's a really interesting presentation. I mean there are several interesting points that I thought came across which will follow up in the Q&A. One was a spatial and temporal dimensions of the pandemic. That's very important. The second was I thought really interesting the U shaped effects of pandemic and cash transfers in Latin America, which is something somewhat content intuitive when question is, we see that in other parts of the developing world. Of course implications of global inequality. I'm going to now ask Marta Roy to make her comments on your presentation also thoughts on exactly questions of implications of the pandemic on global inequality. Marta, over to you. Thanks very much Kunal and thanks very much. It's a pleasure to be here. Thanks very much for the invitation. It's a pleasure and an honor. I'm giving myself a timer and I'm going to try to try to stick to 10 minutes or less. Let's see if I get to it. Let me share my screen. Okay, so on the policy implications, Francois has said that the pandemic exposes existing inequalities and can make them worse. One is what can we do about it. From our point of view here at the UN secretariat, we have presented this crisis as a tipping point as a fork in the road, a moment where the inequalities may be too large to be ignored. And something has to be done about it. So what are the implications for policy. And here I want to distinguish two different types of implications. I can't seem to have trouble moving my presentation. Can you see the next slide. Yes, it is fine. Go ahead. Perfect. I'm sorry. So within country inequality from where we stand, we, I would say, and this is my opinion, there's reason for hope. There seems to be more awareness among member states and more willingness to go for both policy options than there was in the past, say after the 2008 crisis. There is some for hope also in terms of the rescue packages that have been put in place, larger also than in 2008, and with a significant amount of discretionary spending on social protection as Francois has shown. Many of these are those rescue packages based on preliminary evidence may have been able to arrest the growing inequality trend. So reason for hope when it comes to addressing within country inequalities, at least in terms of the commitment that governments are showing inequality between countries that's more uncertain, because obviously countries are plagued with domestic problems and when countries have played with domestic problems they are less likely to show solidarity across their borders. There are some shows of solidarity that there are dead relief measures, very, very short, very focused in terms of letting countries making sure that countries are able to implement their emergency rescue packages but very, very short leave and very not very there are also efforts to coordinate the vaccine, you know, make sure that the vaccine is available to all countries but then again, you know, including COVAX for example, but then again what we are seeing as the there's almost a perfect correlation between GDP and the availability of vaccine and the speed of the vaccine roll out. So for now, there isn't, we don't see that that anything is changing in terms of addressing inequality between countries. When it comes to inequality within countries, there's increasing commitment but what happens after the rescue packages are withdrawn. Of course, rescue packages are short term measures, one of measures and there's a risk that once again they will be withdrawn too soon. There is increasing number of voices calling already for a move to fiscal austerity as soon as possible. What happens after these packages are withdrawn and here I want to just give a very, very basic message that we have repeating for many years but I think it's worth repeating is that policies matter. Well, too often the discourse on inequalities is rather fatalistic in the sense that growing inequalities are presented as an inexorable trend that results from technological innovation or global integration or in this case a pandemic, as if nothing could be done about them. It is clear that something can be done about it inequalities, the both levels and even trends of inequality are very different among countries, even within the same region, even at the same development level, even equally exposed to trade. So there's something one can do to arrest the growing trends of inequality. This is the first point I want to make. And policies matter for good and for bad. Within the last decades, for example, many policies have been actually counterproductive when it comes to arresting the increasing inequality trend, or have just done nothing to arrest it. Let me give you some examples. One is that redistribution taxes and transfers have failed to go to curve the trend towards growing inequality. This graph presents a very rough indicator of redistribution, which is the difference between the genicoefficient of market income shown in orange and genicoefficient of disposable income. Again, a very rough measure of distribution that are better analysis. Francois mentioned the commitment for equity initiative has better analysis, but in any case this rough indicator shows that it's not that policies have become less redistributive, or in some cases, yes, the tax system has become less progressive over the last decades, but it's just that they have not become increasingly redistributive as inequality in market income has grown. So that's an example of a policy that has not helped. There are others. Public services, for example, on average has increased in healthcare access to healthcare, the cost of education, the cost of housing as well and this of course affects families that are poorer. There's growing insecurity that's very important there's growing security and precariousness in the world of war changes in the world of war have actually pushed inequality upwards as well. More importantly, there's a growing disconnect between labor market policies in this in institutions, and the changes that are taking place in the world of work in the sense that we have increasing precariousness we have a growing number of people working on their non standard contracts meaning temporary contracts, zero hour contracts, including in the growing gig economy, we have persistent informality in developing countries. And yet we have labor market policies and institutions and even social protection systems that are still designed to for labor markets where most of the working population is in the formal sector and working on their standard contracts. For example, many social protection programs are still tied to a contract with specific employer, other social protection programs, social insurance programs specifically are tied to salary employment. Many are not portable between different jobs, many are not portable across countries so there's a disconnect here. There's a disconnect. And these disconnects, we argue, together with growing inequalities has very negative impacts, very obvious impacts, including on deaths from COVID-19 that could have been prevented but it has also negative political impacts. I'm just looking at the time. Do I still have a couple of minutes. Is that okay? Yes, okay, that's fine. So let me focus for a second on the political, on the negative political impacts of growing inequalities and the disconnect between policies and the reality of today's world of work and beyond. The important thing is declining trust in institutions, increasing this content among the population. Here I'm just showing the example of the United States where trust in government, people who trust governments highly, has declined from the late 1950s to 2017, this is when we have the last data from the Pew Research Center from 70% to 20% and this is also the case perhaps not as deeply but it's also the case in many other developed countries and trust remains low in developing countries. This is a consequence of inequalities but it also poses an obstacle to addressing inequalities because it disenfranchises part of the population, it creates this engagement with public mandates, it makes it therefore harder to implement public mandates to make those investments that would help addressing inequalities in the same in the first place so it creates a vicious cycle and it weakens the social contract. It is in this context that the Secretary General, in a speech that he gave last summer, talked of a new social contract for a new area. His speech was aspirational and then so he gave a list of policy outcomes of a possible new social contract. I'm not, I'm just gonna not going to go through them because I think we all know what these policies are. Some have to do with promoting equal opportunity access to quality education, healthcare and so on other have to do with ensuring equal rights, by putting prejudice and discrimination. There's also some space for redistribution. All these policies of course are linked to each other, promoting equal opportunity is important but one needs tax revenue in order to promote equal opportunity. The issue with policies to reduce inequalities not so much that we don't know what needs to be done, that there's not technical advice to know what has worked and what has not worked in different country context, or even that there's not enough capacity administrative capacity to implement some of these policies, is that there are important obstacles to implementing some of these policies and I think it's important to understand what the obstacles are, in order to be able to mobilize support for these policies. Very quickly, challenges to many of these policies one has been with us for a long time is that many redistributive efforts face opposition for by very powerful sectors of society, this is not new. Again, what's perhaps new is that we have the class coalitions of the past, the class coalitions that supported strong redistributive agendas are do no longer exist. And there are still other working class that supported big new deals in now developed countries doesn't exist and the middle class is shrinking. So we have a change in coalition right now. We have part of the working class that feels excluded that objectively is excluded but also feels excluded and that is important because part of this working class is providing support to fringe political movements that do not necessarily support redistribution. So again, this is not to end on pessimistic note but just to say that it's important to understand the obstacles with the obstacles we face that may weaken the social contract as well in order to think of what to do, and how to convince government and their constituencies that addressing inequality right now is important. In the first half time I was going to say that the secretary general also talk about a new global deal. The need to strengthen multilateralism is a COVID maybe a moment where we succeed in reinforcing global solidarity I was going to speak about tax cooperation and a reform of that architecture but maybe we can talk about this during the break. Thanks so much. And I'm sorry. Thanks so much. Yeah. Now I think what I think is so important what you said was that even before the pandemic hit. We were not doing very well on on sg 10 on inequality. Right. And the pandemic is actually brought into shop of focus our failures in addressing the quality, even prior to the pandemic. So I think that's a very important point and the question for a new social contract is obviously something that one is to think about. So if you have any questions in the q amp a that I can see. Let me ask the first three I can see here are questions from Carlos gratin, Ricardo Santos, and a very interesting question of Marcus excerpt. All three of you are on meter to you. So what I suggest if you can take this week, there is sort of questions all together and please be focused and be to the point. So Carlos, do you want to go ahead. Thank you very much. I was thinking about if you have any reflections on the impact of the pandemic on horizontal inequalities. I think in mostly in terms of age so the pandemic clearly has affected mostly the elderly, especially those living nursing homes, which at the same time could be aggravated by the failure policy failure, you know, managing the crisis in these institutions, but also thinking in terms of the impact on ethnic minorities in some countries for example in the US or immigrants temporary workers, etc. Thank you very much. I think you had two questions you want to go ahead. Yes, I'll try to be quick. Okay, thanks. So, first of all, thank you so much for the presentations and for so it's a pleasure to talk with you again from Mozambique. I would see a new presentation that like it's an excellent presentation I would see some possible caveats in particular on the possible muddle the waters on global inequality effects of COVID. So for one on the instance of incidents of COVID. So if poor countries are younger, i.e. a higher percentage of the population are of ages with lower COVID morbidity. COVID incidents may be lower than average Chetris part of us, but then the elderly in those poor countries may be relatively worse off than elderly in richer countries. And when we look at impacts of lockdown, again, if if poor countries are more rural, i.e. a higher percentage of population lives in rural areas, and rural areas are more sparsely populated and this is necessarily not the rule in all global countries. Then lockdown effects might have been mitigated again, all other things considered. But the urban residents in poorer countries that implemented lockdown may have suffered more and may have had lower access to social compensation measures than urban dwellers from richer countries. So what about vaccination? One could arguably suggest that countries with a younger and mostly rural population again is sparse may manage to normally overcome COVID with a lower rate of vaccination. But what can be the medium and long term effects of an effective effort to reach herd immunity in the global north, and the ineffective effect of reaching the same type of immunity in the global south. So this last question is probably more suited for epidemiologists than for us economists, but they would probably there would be probably an impact on social economic inequality nonetheless. Over. Thanks. Thanks Ricardo. Marcus, if you're online, do you want to ask a question? Yes, thank you very much for the enlightening presentations. Professor Bogeon, I have seen professors Dayton and Milano Beach, explaining that Chinese stronger growth rate inverted its impact on global inequality. Now China is rich enough to increase global inequality when it grows more than everyone else. Does your final result come from that too. Thanks Marcus. I'm going to have one more question coming in if that's okay for Francois and Marta, and then you can answer these questions. Giovanni Balancisi, do you want to ask your question I've admitted to you. Yes, can you hear me. Yes, we can go ahead. And thanks for the excellent presentation. My question just wanted to point to one of the issue on how much do you think that the evolution of functional inequality matters in determining the long term trends that were presented, especially within country, and then related to this, to what extent do you think that COVID could affect also the functional inequality, particularly if we consider the weakening bargaining power of workers and the strengthening bargaining power of certain lead firms, especially in the digital world that continue to grow and record increasing profits, despite the crisis. Thank you very much. Thank you Giovanni. Francois and Marta, do you want to start within Marta respond to the sale of some very interesting questions. Franco, would you want to start. Okay, thank you very much for the questions and thanks Marta for your, your comments I mean, listening to you and many ideas came to my mind but I'm afraid that we won't have time to go over all of them. Let me start first with the question that we just heard on Carlos about horizontal inequality. I'm afraid that we, again, I mean in terms of economic inequality. We don't know very much when we know about health, or let's say the mortality due to COVID we know that they're very well that there is a big difference in terms of ethnicity. The age of course, this is one of the characteristics of this pandemic is to affect older people, but for the impact of the lockdown it's not not completely clear. I believe that one thing is sure. It is a fact that in terms of age the issue is not so much older people versus the rest of the population. It is about younger people and the rest of the population. The people who have been who have been most affected in developed countries has been the young people precisely because they were somewhat part of the informal sector. All those people were working in order to survive, in order to pay for their studies. We're working in restaurants, bars, having this kind of informal part time job, suddenly because of the lockdown didn't have anything to rely on. And the situation for many of those people has been really dramatic. Moreover, the rescue package which went through the official channels of redistribution policies very often could not reach those people because they were not in those official channels. So for all these reasons, I would say that in terms of horizontal inequality, the young people have been the most most affected in many countries. And because ethnicity is also discriminating, I mean, because ethnic people or ethnic young people tend to be also in the informal sector, more or less in all countries, I would say that there is also an impact on this. On the question by Ricardo about the fact that we should take into account when referring to developing countries, the fact that the rural area, the rural sector is more important. That's true. Because of that, you have a more dispersed population because of this virus may not have been as the impact has not been as severe as it could have been. This is true. In terms of the lockdown, remember that in many countries, we saw a reverse migration process. And the reverse migration process has affected rural areas because look at what happened in India, for example. Very, very soon after the day decided about the lockdown, many people left the big cities to go back to the villages. But this means that in the villages you had many more people to share what was available in those villages. Those people have also been affected. But it was a consequence of the lockdown in the city. And this is a phenomenon which I believe has been quite important in a few countries, but which were not able to analyze very well. Moreover, because it's not sure that in the future will be able to do that, basically because the information on this temporary reverse migration might not be available. This is an important point to take into account. And what you told about the fact that in the future, things may not be that bad in those countries. Things may depend very, very much on the mutation from the fear of the virus. We know that some variants are much more aggressive than others. And in particular, these days, the concern about many countries in Sub-Saharan Africa is precisely the fact that there seems to be an increase in the aggressivity of the virus due to the fact that the variant is completely different. And if this is okay, then the problem may be very serious in the future and vaccination may become a very important need in the future. Remember also that the new variants seem to be less discriminatory with respect to age. So your point about less people are younger in developing countries, which is absolutely correct, may not be as important anymore in the future if the variants are attacking or are being, are hitting much more severely people in middle age at middle age. In about Marcos point about China, as a matter of fact, I am the one who suggested to Angus Deaton that he should look at China and probably because in initial version he said China has contributed to equalize the distribution. And I told him, look, the problem today is that China has been reaching a level which is above the median in the global distribution and because of that, China's growth is today contributing more to inequality than to equality, which it did for many decades before. So, but in with my data, I find the same thing as Deaton and Milanovic. Basically, what is interesting is the fact that Deaton, I've not seen what Branko Milanovic has done, but Deaton is using the, as a measure of inequality is a standard deviation of logarithm. When I'm using the standard deviation of logarithm, I find the same result as he did. If I'm using the genie coefficient or the tile coefficient or other, I don't find this, this change, this specific effect due to China. I would suggest that if we were to look at Lorentz curves of those distribution, most likely it cannot be said that the Lorentz curve is shifting upward or shifting inward. This means that the Lorentz curve is crossing or crossing each other and the different inequality measures will give different responses to the question of increasing or decreasing inequality. To tell you about the functional distribution, you're right that in the past, the evolution of functional distribution in many countries has been in favor of capital and this contributed to more inequality. You have to remember that there is a big difference between market income inequality, where the functional income distribution plays a direct role, and the inequality of disposable income, or the inequality of equalized disposable household income when we take into account the distribution system. When you look at these developed countries today, and it is more or less a kind of picture that Marta has shown, you see that the increase in inequality of income after all the distribution taxes and benefits has not been that big. And as a matter of fact, we know when we look at averages that the increase is due to a very reduced number of countries, in particular the US, but in most European countries, for example, the distribution of disposable, I equalize the possible income has practically not changed. So this issue of the functional distribution is important when we look at market income. And in other words, when we ignore the impact of distribution. Now at the global level. I'm not clear about this. And is it possible to say something about the COVID. I'm not sure about this. It is too early. Now this is the last remark I want to make and must say that listening to Marta this came to my mind. There is something which I completely ignored in my presentation and this is really a big problem so I apologize for that. When talking about the legacy of the crisis. So let's just look at what will be the exit of the crisis. What will be the exit of the lockdown situation in which we still have many, we still find many countries, or at least a few, or this kind of measures which have been taken. What will happen when in those countries, the rescue package will progressively be dismantled. This is where the issue will really start. This is when we will see problems in the labor market. This is when we will see unemployment going up. This is when we will see firms, which have been able to stay alive during the crisis because they are supported by the policies, state policies, suddenly those firms will go bankrupt. This is true both in developing as in developed countries. So, the big issue from my point of view will be beside them. Maybe it will be at the end of this year 2021 maybe it will be at the beginning of the 2022. Probably the big impact of the crisis will be at that moment and then my gut feeling and my almost my conviction is that then inequality will definitely be increasing within countries because it would be very surprising that the distribution of the policies which have been put in place during the COVID might be maintained as such for a very long time. I mean the cost, the cost is really enormous and at some stage there will be an issue with the indebtedness of those countries. So, this is something which is missing in my presentation. Again, I apologize for that because this is certainly very, very important point for what will happen within countries and what will happen at the global level. And I stop here. Francis, thank you so much. I think that's a really important point that we still don't know yet what the impact of the pandemic will be when the state starts withdrawing support that they have provided to workers. So that's something we'll have to see the next year or so. Marta, I wanted to ask you, do you want to respond particularly in the questions on horizontal inequality and also on weakening bargaining power workers? Horizontal inequality because I know that you and your division will be working on this issue for quite some time. And on the weakening bargaining power workers, I think this is linked to the question that you raised was the social contract. You want to go ahead? So on the horizontal inequalities, I don't know, I can say better than Francois if they are going to increase or not. But policy-wise, what matters is what the cost of these different impacts of COVID on, say, different racial groups, what the cost is. More in the informal sector because of low income because of lower access to better education, the digital divide and so on. Or are they more affected because of discrimination? Too often in the press there seems to be an assumption that any racial differences in the impact of the crisis are due to discrimination. It's not so sure. I haven't seen any studies that control for everything else for the socioeconomic status of these racial minorities before making assumptions. But the policy implications are very different depending on the root of these differences between ethnic groups, for example. Just one thing though, there was a question on vaccination and global integration and what happens if populations that are younger and more rural reach herd immunity without necessarily being vaccinated in the south. One issue that may be affected is obviously international migration. If having been vaccinated becomes a condition for traveling internationally, then we are going back in time many, many years. Many people will not be allowed to migrate or even travel anymore. That's a good point. So that's something that may stay with us. The issue of a new social contract is complex, but that I think is precisely why the Secretary General put on the table the need for a new social contract precisely because the different stakeholders don't have the same power that they had 50 years ago anymore. Because workers don't have the same power, don't have a voice because they are not unionized and unions are not fit for today's challenges. That's what was on the table. How do we give these workers that have lost their voice again? And that may help also regain trust in government and so on. I don't have an answer, but I think it's in everyone's interest that people who have lost their voice be given a voice. And I'm not answering the question here. I think it would be a much longer discussion, but just some reflections. Thank you, Marta. Thank you so much. Thanks to Francois. We are already six minutes past the hour, so I'm going to bring this webinar to a close. We had some really great questions and very interesting presentations. Just want to remind those who are watching this webinar that the next webinar will be on the 23rd of March. And that will be looking at the effect of the pandemic on a specific set of workers, government workers in a particular country context Bangladesh. You can find further details about this webinar, the next webinar on our website. Thanks so much, Marta. Thanks so much, Francois. It was really interesting. And I think the question, I think the way to think about this now is that we need to get better data really to have a better sense of what has happened to inequality, both within country and across countries. That we may have to wait for a bit longer because that's not going to happen. The data will not arrive right away. But I think it's important to get a better sense of what's happening because at this point it's still not very obvious, especially across country inequality as you mentioned. So that's going to be really interesting to see exactly what we see from the data when we start getting it the next few months. Thank you so much. And thanks to everyone for listening in and thanks for the great questions. Bye-bye. Thanks so much. Bye-bye.