Immunity-driven Comparative Advantage and its Palliative Effect on Social Health and Inequality: A Theoretical Perspective. A new GLO Discussion Paper by Sugata Marjit and GLO Fellow Gouranga Das.

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A new GLO Discussion Paper studies the implications of a theoretical model where the rich being scared of the spread of an infection hire the poor to work in exposure-intensive outdoor activities, which will improve the economic position of the unskilled.

Gouranga Das

GLO Discussion Paper No. 1252, 2023

Immunity-driven Comparative Advantage and its Palliative Effect on Social Health and Inequality: A Theoretical Perspective – Download PDF
by Marjit, Sugata & Das, Gouranga G.

GLO Fellow Gouranga Das

Author Abstract: We propose a model of “trade” between high income and low-income groups where the rich being scared of the spread of infection hires the poor to engage them in exposure-intensive outdoor activities as workers in the household industry. People who endure hardships and sustain exposure to unhygienic conditions may develop stronger immunity to fight the ongoing pandemic than members of the privileged class. The low-income group has greater endowment of immunity to income and for the rich it is lower. If such exchange takes place, essentially less immune people are withdrawn from exposure intensive activities and are being substituted by more immune workers. Thus, the spread and fatality will reduce with such a trade. The greater is the inequality, the more would be demand for labor for such work resulting in greater volume of such trade between low income and high-income workers. Thus, spread of the disease will be lower for countries where inequality is high. Later under a general equilibrium setting, we show that, ceteris paribus, a pandemic with a significant threat of infection and fatality would mean greater demand for poor workers; their income would rise and inequality would decline. If the pandemic increases demand for the top skilled, such as the case with virtual activities and derived demand for low skilled, relative wage for the top and bottom would increase.

JUST PUBLISHED

Vol. 36, Issue 2, April 2023: Journal of Population Economics (JOPE) 16 articles.
https://link.springer.com/journal/148/volumes-and-issues/36-2

Vol. 36, Issue 1, January 2023: Journal of Population Economics (JOPE) 16 articles. https://link.springer.com/journal/148/volumes-and-issues/36-1
Watch the videos of article presentations on December 1, 2022 during the GLO Global Conference 2022.

JOPE has CiteScore 6.5 (2021, LINK) & Impact Factor 4.7 (2021, LINK)

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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