This project aims to analyse the distributional effects of the Covid-19 pandemic, taking into account associated lock-down measures and their impact on the labour market, and the emergency income support measures where in place, on selected low and middle income countries. The project uses the SOUTHMOD tax-benefit microsimulation models. A great strength of these models is that it will be possible to isolate the impact of the crisis, and the role of the rescue packages. Different scenarios about the evolution of the crisis will be explored, although results will be mostly discussed with respect to a central “best guess” or “mean” scenario.
The Covid-19 global pandemic has already had a devastating impact on people’s lives and the global and national economies, and there is an urgent need for countries and donors to have up-to-date evidence to help inform strategies to minimise the detrimental impact of the virus. Developing countries are particularly exposed to the virus due to the weaker healthcare and welfare systems in place, the risks of famine, volatile commodity prices, and the low standards of living which make it much harder for people to keep safe. It has been estimated that poverty could increase by half a billion people (Sumner et al., 2020), that 81 percent of the world’s workforce is currently affected by lockdown measures (ILO, 2020), that Africa will be hit by at least $100 billion in economic costs this year (te Velde, 2020), and that Latin America will experience a contraction of -5.3% of GDP (ECLAC, 2020).
Each country faces unique challenges, with different epidemiological dynamics and policy responses. Comparative analysis enables the specificities of each country to be unpacked whilst addressing the analytical questions using a harmonised framework. The SOUTHMOD country models, which have been developed as part of a collaboration between UNU-WIDER, the University of Essex, SASPRI and local teams provide a unique opportunity to undertake analysis of this type quickly. The SOUTHMOD models are each underpinned by the EUROMOD software which has been designed to enable maximum transparency and flexibility for the user.
