Inequality and Unemployment in the Growth and Recovery Process

The global economic crisis has led to an increase in unemployment worldwide, and the recovery in unemployment is likely to be slower than the recovery in output. It is also likely to have shortand long-term distributional consequences, with previous evidence suggesting that inequality tends to rise during periods of crisis, as the poor are generally less able to protect their incomes than are the rich. Furthermore, inequality is tends to be ‘sticky’ in that after increases in inequality it is liable to remain at higher levels (unless there are strong interventions to bring it down).