Subnational income, convergence, and the COVID-19 pandemic

The COVID-19 pandemic severely affected the growth and subnational distribution of income in low-income countries. To understand these effects, we produce monthly aggregates on gross national income (GNI) for 147 Pakistani districts through real-time data and machine learning between 2012 and 2021.

Three findings emerge from our analysis. First, urban districts experienced a sizeable decline in income during the pandemic, as their monthly growth rate dropped by 0.21%. Second, districts with a higher COVID-19 incidence experienced larger income drops. Third, COVID-19 accelerated the within-country convergence, as districts with high pre-pandemic income experienced a stronger negative growth during the pandemic.