Social stability challenged by Covid-19: Pandemics, inequality and policy responses

The public health measures implemented to limit the COVID-19 pandemic are likely to affect economic inequalities. In this paper we first provide a theoretical framework to analyse how income inequality contributes shaping the trade-off between economic lockdown and contagion. Our empirical analysis on EU countries shows that the lockdown is likely to significantly increase inequality and poverty and that the magnitude of the change is larger in more unequal countries. To avoid social collapse, countries must consider inequality as an additional source of fragility, while supranational, coordinated health and fiscal policies are needed in the interest of all European economies. (C) 2020 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Automated summary

The public health measures implemented to limit the COVID-19 pandemic may affect economic inequalities, with lockdown likely to significantly increase inequality and poverty in more unequal countries. Coordinated health and fiscal policies are necessary to prevent social collapse and protect all European economies.