Analysis of the labour market impacts of the coronavirus pandemic: Evidence from Zambia

Abstract

ABSTRACTThis paper examines the short-term impact of the Coronavirus pandemic on firms in a developing country i.e. Zambia. This is motivated by the characteristics of the Labour market in developing countries where informality dominates, and female workers form a larger proportion of the informal workforce. The Zambian version of the World Bank Enterprise Survey conducted just before the pandemic (September 2019 to March 2020) and during the pandemic (June 6 to 17 July 2020) is used to explore the experience of firms in terms of changes in the number of employees and firm survival. Results suggest that informal workers are more likely to lose their jobs while firms that are at least partly owned/managed by females are also less likely to survive. It is argued that policy actions that protect informal workers are salient especially since future pandemics cannot be ruled out.KEYWORDS: COVID-19 pandemicinformalityfirm survivalJEL: L25L26J08J46 Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 See https://reliefweb.int/report/zambia/zambia-situation-report-6-july-2020.2 See https://www.theigc.org/blog/one-year-on-zambian-economy-during-covid-19/.3 See https://bfaglobal.com/covid-19/insights/zambia-msmes-during-covid-19/.4 For example, some experts suggest that herd immunity may not materialize even with the vaccines because of the different variants of the virus in circulation https://theconversation.com/covid-19-herd-immunity-its-not-going-to-happen-so-what-next-165471.5 International statistical standards distinguish between employment in the informal sector and informal employment, the latter which is the concept of interest in this paper refers to the employment relationship and protection associated with the worker’s job (Bonnet et al., Citation2019).6 Except for Adjust production for COVID, % decrease in sales, and the outcome variables which were sourced from the follow up data. COVID-19 reproductive rate was sourced from the Our World in Data (Ritchie et al., Citation2020).Additional informationFundingThis study was funded by Open Society Foundation (OSF) and the Southern Centre for Inequality Studies (SCIS) at the University of the Witwatersrand Financial interests: The authors declare they have no financial interests Data availability: The datasets analysed during the current study are available in the WORLD BANK ENTERPRISE SURVEY repository, https://www.enterprisesurveys.org/en/survey-datasets.