The developed, developing, and least developed countries have been experiencing differing levels of inequality over the years. The economic and financial crises have also been aggravating the extent of inequality. The Sustainable Development Goal (SDG) 10 emphasizes reducing inequality that is prevalent within and amongst the countries. The COVID-19 pandemic is expected to reverse the progress made so far in reducing inequality. Hence, the average Gini coefficient is expected to increase by 6% for emerging and developing countries. Therefore, the present study aims to undertake an analysis of the impact of past crises and the current COVID-19 crisis on global inequalities. The world inequality database has been utilized for analyzing the impact. This study will certainly enable the policymakers to implement policies with the help of which the SDG 10 can ultimately be achieved by 2030.
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For centuries, the economies in the world have been grappling with several pressing socio-economic, political, environmental, and cultural problems other than inequality. It is not the case that inequality is the most severe of all issues. However, these problems can be accentuated further due to the increasing economic inequalities (Champernowne & Cowell, 1998). For instance, poverty concentration as a form of economic inequality can cause an increase in the crime rate and unrest in societies (Kang, 2016). “Inequality refers to the unequal and/or unjust distribution of resources and opportunities among members of a given society” (Koh, 2019). Different forms of inequalities have been experienced by people like social, economic, regional, and political, to name a few.
Further, though economic inequality and income inequality terms are interchangeably used, the former is a broader term (Sen, 1997). The impact of economic inequality on economic growth and other social factors like crime, political conflicts, health, and education has also been explored in the past (Thorbecke & Charumilind, 2002). Kuznets (1955) found that after the second world war, the income distribution in underdeveloped countries was more unequal than the developed countries. He also emphasized that income inequality initially increases but later decreases during long-term growth. The term inequality of opportunity is frequently discussed and widely researched these days. However, it is not a very new concept. In 1937, Franklin Roosevelt emphasized the necessity to have equality of opportunity. The inequality of opportunity differs widely across the countries, and the circumstances like gender, family background, race, religion, disability, etc., are causing much higher income and consumption inequalities. In addition, though the inequality of effort results in an increase in the growth of the countries, the inequality of opportunity is causing a decline in their development. It can further lead to intergenerational inequalities. Hence, macroeconomic stability and sustainable growth can be at risk due to growing inequalities (Ferreira, 2019; International Monetary Fund [IMF], 2022).