How Did Urban Household Enterprises in Sub-Saharan Africa Fare during COVID-19 ? Evidence from High-Frequency Phone Surveys

Wendy Cunningham, Feraud Tchuisseu, Mariana Viollaz, Ifeanyi Nzegwu Edochie, David Newhouse and Federica Ricaldi

No 10360, Policy Research Working Paper Series from The World Bank

Abstract: While the impact of COVID-19 on Sub-Saharan African labor markets is well documented, there is suggestive evidence that urban households may have fared particularly poorly. This paper uses data from high-frequency phone surveys in 27 Sub-Saharan African countries to investigate which kinds of urban household enterprises were most affected, what coping strategies were utilized, and heterogeneity by sociodemographic characteristics in the short and medium run. Using linear probability models, the paper finds that households that relied on income from non-farm enterprises were hit particularly hard during the early stage of the crisis, with 20-26 percent reporting income declines, and women experiencing even greater losses. Few coping strategies were utilized in the short run to counterbalance the loss of enterprise income. As the crisis progressed, wage employment recovered more quickly than self-employment, with faster gains for non-farm household enterprises, less poor households, and those headed by males and adults. Women, adults, and non-poor self-employed household heads were more successful at leveraging external sources of support early in the pandemic, but these supports largely dropped off by August 2020. These results demonstrate the vulnerability of non-farm household enterprises in urban Sub-Saharan Africa to the COVID-19 shock and highlight the need to expand publicly and privately financed coping mechanisms, particularly for women, youth, and poor household heads who are self-employed.

Date: 2023-03-13
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