would imply that projections (of global impact) using distribution-neutral GDP growth rates of countries are likely to mildly understate the pandemic’s aggregate impact on global poverty and income inequality.

Inequality impacts of the pandemic should not be seen only through the lens of income inequality, but rather as a spectrum of dis-equalizing effects on multiple dimensions of well-being, some of which are likely to be harmful for social mobility and long-run inequality. COVID-19 struck in a world with already high structural inequality and low socioeconomic mobility in most of the developing world. As the shock led to a widening of pre-existing gaps in opportunities and incomes in many countries, it may have triggered processes that continue widening gaps between privileged and vulnerable groups even as economic growth rebounds. This is the reason why major epidemics in the last two decades have been associated with higher within-country inequality five years later (Furceri et al., 2020). While the long-term impacts of COVID-19 on inequality in developing countries cannot be known yet, HFPS data for some countries from the early days of economic recovery can be used to identify patterns in the trajectory of household well-being. An inequitable recovery would foreshadow a higher long-term risk to inequality and social mobility.

As economic activity starts to return where policies are becoming less stringent, there are reasons to be concerned about the pandemic’s more lasting consequences for inequality and social mobility. Globally, the recovery in 2021 appears to be concentrated in the upper half of the global income distribution, while the lower end of the distribution who suffered the most losses in 2020 fall further behind as growth outlook for many developing countries lags the recovery in richer economies. On the positive side, across a sample of 17 developing countries with comparable HFPS data between May-June and August-September (2020) where policies became more conducive to economic activity, significant improvements in employment, incomes and food security are observed. However, the employment recovery appears to be both slow and uneven. Employment among those who suffered larger initial shocks – women, non-college-educated, and urban workers – did not recover enough to close the gap caused by initial disparities in losses. More recent data for 8 countries up to January 2021 suggest that these disparities have persisted even as recovery in employment seems to have stalled, that too at levels that are well short of the pre-pandemic state. There are indications that self-employment, which is often lower-quality employment in developing countries, is accounting for a high share of the employment that is coming back.

Beyond its effects on jobs and incomes of the current generation of workers, the pandemic could reduce economic mobility across generations through its impacts on human capital development of children. Past research suggests that intergenerational mobility can be constrained by unexpected job losses caused by firm closures and mass layoffs, due to their long-lasting impacts on family incomes that in turn affect education of children in low-income families (Oreopoulos et al 2008). In the context of this pandemic, the income effect of job losses is compounded by the large and inequitable impacts of learning losses. A large share of children in poorer families, particularly in low-income countries, had almost no access to learning opportunities during school closures, resulting in disparities in learning losses that could persist over time and further reduce intergenerational mobility. The simulations by Neidhoefer et al (2021) suggest that despite the mitigation policies adopted in some countries, loss of instruction from school closures is likely to affect the education of the children from vulnerable households most seriously, and particularly secondary school attainment of children in less-educated families.

Making our societies more equitable and resilient to future crises requires taking on structural inequalities today, to help women, low-skilled workers, and urban informal sector workers recover from the deep losses they suffered, so that they do not fall further behind even as economies recover. Moreover, a global shortage of COVID-19 vaccines adds to the risks of an uneven recovery, with vaccination rates in low-income countries remaining very low compared to advanced economies. Thus, an important policy priority is ensuring adequate and equitable access to vaccines in developing countries. Governments also need to help 27