The impact of firm downsizing on workers: Evidence from Ethiopia’s ready-made garment industry

Morgan Hardy, Gisella Kagy, Eyoual Demeke, Marc Witte and Christian Johannes Meyer

World Development, 2024, vol. 176, issue C

Abstract: We analyze matched employee–employer data from Ethiopia’s largest special economic zone during a period of downsizing pressure from the COVID-19 world import demand shock. We observe substantial job displacement during the shock peak, particularly for new hires. These largely female and rural-to-urban migrants persistently “fall off the employment ladder”, remaining unemployed both within and outside the zone even after employers have recovered from the shock. We observe high levels of urban-centered food insecurity and depression symptoms during the crisis peak, regardless of employment status. Our findings highlight the importance of social protection policies within export-oriented development strategies.

Keywords: Job displacement; Trade shock; Global value chains; Gender; Ethiopia; COVID-19 (search for similar items in EconPapers)
JEL-codes: D91 I12 I18 J65 O12 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:176:y:2024:i:c:s0305750x23002309

DOI: 10.1016/j.worlddev.2023.106412

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