Inequality and negative growth hit poor households much harder (IMAGE)
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“This graph shows that in times of negative economic growth like we experienced during COVID and up to now, some countries are still struggling to get out of negative economic growth. We see that the poorer people suffer more in terms of their consumption welfare in relation to the effect of inequality and the effect of negative growth,” says Prof Nicholas Ngepah from the University of Johannesburg. Ngepah published a first-of-its-kind analysis of district-level data in the Journal of African Economies at https://doi.org/10.1093/jae/ejae020. “The policy implication is that in times of economic shocks, attention should be given more to the welfare of the poor. This goes to underscore social safety nets that have been put in place. We advocate that these should be enhanced in preparation for times of economic shocks, in particular during times when the economy is growing negatively or shrinking,” he adds.
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Therese van Wyk and Nicholas Ngepah, University of Johannesburg.
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