The eighth event in our Facing Inequality series, "Short and Long Run Distributional Impacts of COVID-19 in Latin America" features Nora Lustig and Guido Neidhöfer, with discussant Stephen Kaplan. They discussed their paper, "Short and long-run distributional impacts of COVID-19 in Latin America" (Lustig, Neidhöfer and Tommasi) which covers the potential effects on short-term poverty and inequality and on intergenerational educational mobility in Argentina, Brazil, Colombia, and Mexico.
The paper shows that the short-term impact on income inequality and poverty can be very significant but that additional spending on social assistance has a large offsetting effect in Brazil and Argentina. The effect is much smaller in Colombia and nil in Mexico, where there has been no such expansion. To project the long-term consequences, they estimate the impact of the pandemic on human capital and its intergenerational persistence. Hereby, they use information on school lockdowns, educational mitigation policies, and account for educational losses related to parental job loss. The findings show that in all four countries the impact is strongly asymmetric and affects particularly the human capital of the most vulnerable. Consequently, educational inequality and inequality of opportunity are expected to increase substantially, in spite of the mitigation policies.
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