Effects of Income Inequality on Covid-19 in Africa: Accounting for Literacy and Informal Sector.

Aurelien Kamdem Yeyouomo, University of Yaoundé II
Etayibtalnam KOUDJOM, Université de Lomé

The literature has been unexplored regarding the analysis of transmission channels in the study of the relationship between income inequality and COVID-19 spread. The aim of this paper is to fill this gap by on the direct and indirect effects of income inequality on COVID-19 by focusing on a sample of 43 Afri-can countries over the period 2020-2022. We use fixed effects regression model. Two indicators of COVID-19 are identified, namely the total number of cases and severity of the disease, as well as two transmission channels, namely the size of the informal sector and literacy. The results of direct analysis show that income inequality positively and significantly affects the spread of COVID-19. Although the indirect analysis supports the positive and significant effect, it appears that estimated coefficients are underestimated in the direct analysis. These results suggest that reducing income gap between indi-viduals is key to coping with health shocks.