Analytical Corner - Session 5: Inclusive Recovery



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Intergenerational Social Mobility in Africa: What Do We Know?

The COVID-19 crisis has had a severe impact on education and employment and has exposed the many social inequities that make some populations more vulnerable to shocks. Despite a vast literature on social mobility in advanced economies, little is known about it in African countries, mainly due to data limitations. Using a large, harmonized dataset of more than 72 million individuals, we fill this gap and examine socioeconomic status mobility across generations, measured by educational and occupational attainment. We uncover the substantial geographical variations in the degree of upward/downward educational and occupational mobility across and within African countries, and the gender and rural/urban divide. Additionally, we explore the determinants of educational and occupational social mobility in the African region. We find that social mobility on the continent could be partly explained by observable individual characteristics (gender, marital status, age, etc.). Lastly, we show that the quality of institutions, the level of public spending on education, social protection coverage, and countries' fragility are strong predictors of social mobility in Africa.


Rasmane Ouedraogo

African Department, IMF


How Pink Are Your Taxes? The Interaction of Tax policy with Gender Equality

Even nominally neutral tax systems can impact economic inequality between genders, because of systemic differences in individuals’ initial endowments, circumstances, and societal biases that interact with tax provisions. For example, household-based taxation is well-documented to have a negative impact on gender equality in the labor market. In addition, the progressivity of the tax system can significantly reduce gender pay and labor supply gaps, through redistributive and behavioral effects. And while labor taxation is likely the most important tax issue given its impact on female employment, other taxes also play an important role for gender equity. Notably, lower effective capital rather than labor income taxation has an additional gender dimension, given that wealth inequality exceeds income inequality across genders. Our analysis suggests that countries with relatively low female shares of capital income and wealth also tend to tax property and inheritances particularly lightly. This association is similarly present in consumption taxes, where tobacco excises are particularly low in countries where smokers are predominantly male. Finally, we argue that support to low-income households and women can be better targeted through mechanisms other than reduced VAT rates, but where reduced rates already exist for necessities, they should also apply to feminine hygiene products. The talk is based on a recently-published working paper (WP/22/26).   


Maria Coelho

Fiscal Affairs Department, IMF


Plentiful Jobs, Scarce Workers? Labor Market Tightness during COVID Times

Two years after the start of the COVID-19 pandemic, a new labor market puzzle has emerged in most advanced economies: unfilled job vacancies have increased sharply above pre-COVID levels even though employment has yet to fully recover. This presentation of a new Staff Discussion Note (SDN) (released in March 2022 and accompanied by the IMF blogs published on January 19 and March 31, 2022) will shed light on this labor market puzzle. Specifically, it will address the following questions: how tight are labor markets in advanced economies? Why are jobs plentiful while workers are comparatively scarce? Does this reflect skills mismatch amid deep labor market transformation in the wake of COVID-19, barriers to returning to work for certain demographic groups (such as older or low-skilled workers), and/or changing worker preferences for jobs leading to a "great resignation"? What are the implications of rising labor market tightness for wage growth and inflation risks, and for wage inequality? Which policies could help ensure that tightness remains a blessing--attracting more disadvantaged groups into the labor market and reducing overall income inequality--rather than a curse--impeding the economic recovery and amplifying inflation risks?


Myrto Oikonomou

Research Department, IMF


Ippei Shibata

Research Department, IMF