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

Morgan Hardy; Gisella Kagy; Eyoual Demeke; Marc Witte; Christian Johannes Meyer

doi:10.1016/j.worlddev.2023.106412

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

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

^*Corresponding author for this work

Research output: Contribution to Journal › Article › Academic › peer-review

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.

Original language	English
Article number	106412
Journal	World Development
Volume	176
DOIs	https://doi.org/10.1016/j.worlddev.2023.106412
Publication status	Published - Apr 2024

Bibliographical note

Funding Information:
The authors’ names are in certified random order. We thank without implicating Tirsit Endrias, Andrew Foster, Kamila Hamza, Kathie Krumm, Koen Maaskant, Fekadu Nigussie, Victoria Strokova, and Robert Chase for assistance and helpful comments and Fatahun Yonas for the partnership and cooperation on our broader project. Seminar participants at Oxford, the World Bank, STEG, LACDev, PSE, and IZA provided helpful comments. We also thank our field team led by Stephanie Annijas and Endale Gebre Gebremedhine, without whom this work would not be possible. Valentina Antonaccio, Daniela Villacreces Villacis, and Anne Schick provided excellent research assistance. We gratefully acknowledge funding by the UK Foreign, Commonwealth & Development Office (FCDO) through the World Bank Group “More, better, and more inclusive jobs: Preparing for successful industrialization in Ethiopia” initiative, the World Bank Development Impact Evaluation (DIME) ieConnect for Impact Program, the International Growth Centre (IGC), and the CEPR/FCDO Private Enterprise Development in Low-Income Countries (PEDL) initiative. Fieldwork received ethical approval from the University of Oxford Economics Department Research Ethics Committee (protocol #ECONCIA21-21-12). All errors are our own.

Publisher Copyright:
© 2023

Keywords

COVID-19
Ethiopia
Gender
Global value chains
Job displacement
Trade shock

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title = "The impact of firm downsizing on workers: Evidence from Ethiopia's ready-made garment industry",

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.",

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author = "Morgan Hardy and Gisella Kagy and Eyoual Demeke and Marc Witte and Meyer, {Christian Johannes}",

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

Abstract

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Keywords

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