Changes in income distributions in China, India and the United States, 2018-23: The effects of covid and the return to “normalcy” – Branko Milanovic

“The effects of covid were noticeable in all three countries, but also temporary. By 2022, US and China had returned to their ‘normal’ trends which in both cases are a broadly stable overall inequality, and so did probably India. Fundamentally, the epidemic did not change anything…”

BUT government interventions early in the pandemic temporarily reduced US inequality by historic proportions:

“To appreciate it even better, note that 1.5 Gini points increase in market income inequality and 1.5 Gini point decrease in disposable income inequality, means that the effect of the stimulus was to reduce Gini by 3 points. This is quite unprecedented, and when I looked at the US data in the past fifty years there was not a single year with such a big pro-poor change. If you want to annoy your liberal friends you can tell them that the most inequality-reducing policies in the past half-century took place during the last year of the Trump administration.”

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