More Spatial Balance with a Health Calamity? Accounting for the Effects of the COVID-19 Pandemic on the Brazilian Regional Income Inequality

Abstract

The COVID-19 crisis has left negative economic marks on Brazil, with the GDP dropping by approximately 3.9% between 2019 and 2020. However, its impact on regional income disparity remains unclear. Less developed states, with fragile healthcare systems, face greater challenges in dealing with the health issues brought by the pandemic, while more prosperous ones, with more structured economies, suffer more from restrictions and lockdowns. Additionally, government policies such as the Emergency Aid played a crucial role in income redistribution, benefiting the most in need. This study, using data from PNADC between 2012 and 2022 and inequality analysis methods, examines the dynamics of regional income disparity in Brazil pre and post-pandemic. The results suggest that the crisis has contributed to reducing regional income disparities, highlighting the relevance of public policies and changes in market income sources.