– – shocks women, urban workers, and the low-educated recovered more slowly during the initial relaxation of policy stringency measures during the summer of 2020 (Narayan et al. 2022). ILO (2021) using labor force survey data finds that the labor market recovery stalled during 2021, with little progress since the last quarter of 2020. Kim et al. (2021) using phone survey data from East Asian countries, find that employment impacts were widespread across the distribution when mobility restrictions were stringent, but it was more difficult for poorer workers to regain employment once stringencies had been relaxed. This pattern is also found in the US (Chetty et al. 2020; Lee et al. 2021), Colombia (Alvarez and Pizzinelli 2021), and India (Kugler and Sinha 2020).

– This paper’s first contribution is the use of a unique data source arguably the most – comprehensive data collection effort during the pandemic to provide an analysis of the initial welfare impact, notably employment and income, and its evolution in the first two years of the pandemic, across and within countries.

Focusing solely on the levels of employment could obscure some of the welfare effects of the pandemic. In particular, transitions into agriculture and self-employment would likely be associated with lower quality informal jobs, yielding lower remuneration vis-`a-vis prepandemic wage employment. For instance, Kugler, Viollaz, et al. (2021) document a fall in wage employment and an equivalent increase in the share of self-employment among younger workers during the early stages of the pandemic. Such coping strategies may be more prevalent among lower-income households, who lack access to safety nets and cannot sustain prolonged unemployment spells for fear of not being able to cover basic necessities. Therefore, another contribution of this paper is the analysis of employment transitions for different population groups during the pandemic to examine not only the scope of employment changes, but also changes in the quality of employment across different population groups.

Despite the uneven impact of the pandemic across population groups, the estimated shortrun impacts of COVID-19 on aggregate within-country income inequality so far appear to be mixed (World Bank 2022b).<sup>5</sup> However, research on the inequality impacts of previous pandemics suggests that they could peak 4-5 years after the onset of the pandemic (Furceri et al. 2022). The impacts of the COVID-19 pandemic on inequality could worsen over time

> 5While traditionally vulnerable groups appear to have experienced greater losses as seen in group-wise comparisons, the final impact on within-country inequality depends on where these groups are located in the overall income distribution. In an analysis combining prepandemic household survey data with information from high-frequency phone surveys and macroeconomic growth projections, Mahler et al. (2022) estimate the change in the Gini index after COVID-19. These projections complement Ginis published by National Statistical Offices and estimates from the literature and household surveys conducted in 2020. The result shows a mix of positive and negative changes in within-country inequality, with the magnitude being small in most cases.

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