The short-term economic effects of COVID-19 on low-income households in rural Kenya: An analysis using weekly financial household data

Wendy Janssens, Menno Pradhan, Richard de Groot*, Estelle Sidze, Hermann Pythagore Pierre Donfouet, Amanuel Abajobir

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This research assesses how low-income households in rural Kenya coped with the immediate economic consequences of the COVID-19 pandemic. It uses granular financial data from weekly household interviews covering six weeks before the first case was detected in Kenya to five weeks after during which various containment measures were implemented. Based on household-level fixed-effects regressions, our results suggest that income from work decreased with almost one-third and income from gifts and remittances reduced by more than one-third after the start of the pandemic. Nevertheless, household expenditures on food remained at pre-COVID levels. We do not find evidence that households coped with reduced income through increased borrowing, selling assets or withdrawing savings. Instead, they gave out less gifts and remittances themselves, lent less money to others and postponed loan repayments. Moreover, they significantly reduced expenditures on schooling and transportation, in line with the school closures and travel restrictions. Thus, despite their affected livelihoods, households managed to keep food expenditures at par, but this came at the cost of reduced informal risk-sharing and social support between households.

Original languageEnglish
Article number105280
Pages (from-to)1-8
Number of pages8
JournalWorld Development
Volume138
Early online date25 Nov 2020
DOIs
Publication statusE-pub ahead of print - 25 Nov 2020

Keywords

  • COVID-19 pandemic
  • East Africa
  • Economic effects
  • Fixed-effects regressions
  • Kenya
  • Risk-coping

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