While the distributional impacts of the COVID-19 pandemic have been well-documented in high-income countries, studies in low- and middle-income countries have been relatively rare due to data limitations. This paper uses pre-pandemic household welfare data and high-frequency household phone survey data from seven middle-income countries in East Asia and the Pacific, spanning May 2020 to May 2021, to analyze the distributional impacts of the pandemic and their implications for equitable recovery. The results indicate that employment impacts at the extensive margin have been large and widespread across the welfare distribution during times of stringent mobility restrictions (low mobility). When mobility restrictions have been relaxed, however, employment impacts have been larger among poorer workers who have found it more difficult to return to employment. Data on the loss of labor income also suggests that the pandemic has exacerbated existing inequalities. In addition to being more susceptible to employment and income shocks, poorer households in East Asia and the Pacific are at higher risk of experiencing long-term scarring from the pandemic – due to rising food insecurity, increased debt, distress sale of assets, and fewer distance/interactive learning opportunities for their children. Taken together, the findings indicate that inequality has worsened during the pandemic, raising concerns about the prospects for an inclusive recovery in the absence of appropriate policy measures.
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