The sources of the Kuznets relationship between the COVID-19 mortality rate and economic performance

Abstract

This paper discusses the findings of an empirical analysis of the Kuznets, or reverse U-shaped relationship, between the COVID-19 mortality rate and economic performance. In the early stages of economic development, the COVID-19 mortality rate is anticipated to rise with rising economic activity and urbanization. Eventually, the mortality rate decreases at higher economic development levels as people and the government are more capable of investing in disease abatement measures. The quality of political institutions, wealth distribution, urbanization, vaccination rate, and improvements in healthcare systems are hypothesized to affect the COVID-19 mortality rate. Examining this relationship can be effective in understanding the change in the COVID-19 mortality rate at different economic performance stages and in identifying appropriate preventive measures. This study employed the negative binomial regression to model a cross-sectional dataset of 137 countries. Results indicated that the relationship between the per-head gross domestic product (GDP) level and the COVID-19 mortality rate appeared to follow a pattern like the Kuznets curve, implying that changes in institutional quality, healthcare advancements, wealth distribution, urbanization, vaccination rate, and the percentage of the elderly population were significant in explaining the relationship. Improvement of the healthcare system has a notable effect on lowering the COVID-19 mortality rate under more effective government conditions. Additionally, the results suggested that a higher per-head GDP is required to reverse the rising trend of the mortality rate under higher income inequality. Based on these results, preventive measures, and policies to reduce COVID-19 mortalities were recommended in the conclusion section.