Heterogeneous Vulnerability to the COVID-19 Crisis and Implications for Inequality in Japan

Author Name KIKUCHI Shinnosuke (Massachusetts Institute of Technology) / KITAO Sagiri (Faculty Fellow, RIETI) / MIKOSHIBA Minamo (University of Tokyo)
Creation Date/NO. April 2020 20-E-039
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We study how the COVID-19 crisis could affect earnings inequality across heterogeneous individuals in Japan. We use the Employment Status Survey (ESS) to identify groups of individuals who are more vulnerable to the COVID-19 shocks, which likely affect workers in different industries, occupations, and employment types in different magnitude. We assess the impact using various data and early evidence including expenditures data from the JCB Consumption NOW during the first weeks of the pandemic. Our study identifies significant heterogeneity in vulnerability to the COVID-19 shocks across workers of different types. We find that the crisis will hit low-income groups by more and is likely to significantly exacerbate inequality through multiple channels, calling for urgent and large-scale assistance targeted towards affected individuals.