Long COVID: The evolution of household welfare in developing countries during the pandemic

Abstract

This study examines household welfare dynamics during the COVID-19 pandemic, using harmonized data from over 300 phone surveys in 80 countries during 2020 and 2021, representing more than 2.5 billion people. The analysis traces out the evolution of employment and income across and within countries as restrictions on economic activity were relaxed. We show some groups initially experiencing higher rates of employment loss – including women, informal workers, and those with less education – also recovered jobs at a slower pace. Based on panel regressions, changes in policy stringency were associated with unequal employment outcomes. Labor market transitions were toward jobs of inferior quality on average, especially for workers with less education. Household income dynamics suggest uneven impacts in the intensive margin of employment consistent with these transitions. Lower wages were not offset by additional social assistance. Taken together, these dynamics may amplify the inequality impacts of the pandemic over the medium to long term.