POLICY BRIEF NOVEMBER, 2021 Assistance and coping strategies in 2020 during covid-19 P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 2 Data and Survey Description1 The data used in this brief come from the first round the ability to meet basic needs, and the coping strategies of the World Bank’s South Asia COVID-19 Phone available to households. This brief summarizes the find- Monitoring Survey, which surveyed individuals in the ings from the safety net and coping mechanisms mod- eight countries of the South Asia Region (SAR) (box 1). ule.  A complementary brief details the labor market The survey assessed the short-run impacts of COVID-19 impacts of the COVID-19 crisis in Nepal.  on the labor market, the impacts of income shocks on Main Messages 1 Assistance was limited and distributed through existing programs that are hard to scale up in response to a crisis. Despite large shocks to labor incomes, only 11 percent of survey respondents reported receiv- ing assistance since March 2020, and only 2 percent reported receiving new or additional assistance since the onset of the pandemic. Assistance was primarily from categorically targeted programs that are hard to scale up for crisis response. The main component of social assistance in Nepal—social pensions—is not as readily amenable to the delivery of assistance in times of crisis as, for instance, in-kind or cash transfers. 2 Vulnerable groups need assistance coping with COVID-19 losses. Certain groups were particularly prone to job and income losses in the first wave of the pandemic. More women than men reported permanently losing a job. Younger workers (15–25) suffered the largest job losses of any age group, with losses concen- trated among the less educated. These groups require assistance to help them cope with the effects of the pandemic and become resilient to future shocks. 3 In the medium to long term, scalable mechanisms need to be developed to deliver assistance and identify target groups. The lack of policy mechanisms that could be scaled up to quickly reach groups that were likely to be affected by the COVID-19 crisis makes it difficult to provide short-term relief in Nepal. The high penetration of mobile phones and access to banking services can provide entry points to innova- tive delivery mechanisms, especially if investments in digital infrastructure increase. 1 The SAR COVID-19 survey is supported by the Program for Asia Connectivity and Trade (PACT), a South Asia regional trust fund administered by the World Bank and funded by the UK Foreign, Commonwealth, and Development Office (FCDO). Additional support from the Evidence for Development initiative funded by the UK Foreign, Commonwealth, and Development Office (FCDO) is gratefully acknowledged. P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 3 Box 1. The SAR COVID-19 Phone Monitoring Survey The SAR COVID-19 Phone Monitoring Survey surveyed 43,000 individuals, including 6,389 in Nepal, over their mobile phones. Roughly half of the sample in Nepal was reached through random digit dialing (RDD); the other half came from a follow-up to the Household Risk and Vulnerability Survey (HRVS).2 This brief reports the results from the nationwide RDD sample of 3,267 Nepali individuals 15 and older who were interviewed between August and October 2020. RDD is a method by which plausible phone numbers are generated using existing mobile phone prefixes. It was used in this survey because there were no recent representative household surveys with phone num- bers of respondents to use as benchmark data. When implemented well, RDD provides a means of collecting data that are representative of the population owning a mobile phone and allow for broad inferences about the impacts of COVID-19. Mobile phone ownership can be biased toward wealthier individuals and better-con- nected regions; patterns of non-response create additional potential sources of bias (if, for example, better-off people are less likely to pick up a number they do not recognize or agree to be surveyed if they do).3 Mobile phone ownership at the household level is high in Nepal (96.2 percent), mitigating the bias associated with RDD. However, in 2019, only 88.3 percent of households in the bottom wealth quintile owned mobile phones, and women 15–49 were less likely to own a mobile phone than men 15–49 (79.3 percent versus 91.4 percent), according to the Multiple Indictors Cluster Survey. Three steps were taken to increase the representativeness of the data and reduce bias: • For a subset of randomly selected calls with male respondents, the interviewer asked to speak to an adult woman in the household. • Caps were applied to the largest subnational administrative units (provinces) in terms of population size, in order to expand the geographic coverage of the sample. • Weights were computed to adjust estimates for different selection probabilities, including phone ownership. In addition, all of the interviewers were women. 2 The background note on the impacts of COVID-19 provides details on these surveys and their sampling. See “The Implications of COVID-19 for Welfare and Vulnerability in Nepal” (http://documents.worldbank.org/curated/en/233291624285050426/ The-Implications-of-COVID-19-for-Welfare-and-Vulnerability-in-Nepal). 3 See “Mobile Phone Surveys for Understanding COVID-19 Impacts: Part I Sampling and Mode” (https://blogs.worldbank.org/impactevaluations/ mobile-phone-surveys-understanding-covid-19-impacts-part-i-sampling-and-mode). P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 4 Effects on labor incomes The COVID-19 crisis significantly affected workers, 44 percent). [See the brief on the effect of COVID-19 on labor percent of the labor force either losing their jobs or market outcomes for details.] facing prolonged periods of absence. Of the jobs lost, 25 percent had still not been recovered by late 2020. Despite these large shocks to labor incomes, very few Two in 10 workers faced prolonged absences that lasted Nepalis received assistance. Only 2 percent of respon- 4.4 months on average,  with the last pay having been dents reporting receiving new or additional public assis- received 4 months before the survey. Though similar tance after the onset of COVID-19. Even before COVID-19, shares of men and women lost jobs, job loss was more social assistance in Nepal was not effective at reaching likely to be permanent for women (30 percent) than men the poor and vulnerable. The lack of preexisting policy (23 percent). People in the youngest age group (15–25), mechanisms that could be scaled up to quickly reach especially new entrants to the labor force, were the most groups likely to be most affected by the crisis severely affected, with 6 in 10 reporting having lost their job. Within limited the response, as did the restricted fiscal space. this age group, people with secondary education or Unemployment benefits and aid to small businesses— higher were less likely than people without any education key components of the COVID response in the devel- to have lost jobs (44 percent versus 66 percent). For the oped world—are unlikely to be large in developing coun- sample as a whole, 46 percent of respondents reported tries, because of fiscal constraints and the challenges of earnings losses, with the figure much higher among the reaching informal workers, including the self-employed, self-employed (60 percent) than among wage workers (20 who make up a large share of the workforce. Effects on ability to meet basic needs Large and sustained job income losses have affected People relying on daily wages outside of the agricul- the ability of Nepalis to meet their basic needs, tural sector fared the worst, with only half saying they with workers who suffered job losses most likely to could sustain themselves for a month. People reliant report concerns about running out of food or having on remittances (29 percent), small businesses (26 per- to reduce consumption of preferred foods. A third cent), and salaried work (24 percent) were more likely of people who lost jobs and a third of those who faced than others to report being able to manage for a month. temporary absences from work said they ran out of food or money to buy food. People who lost jobs or faced Access to services was relatively unaffected during temporary absences were also more likely to report that the first wave of the pandemic. Just  7  percent of they worried about running out of food in a week’s time. respondents said they had difficulties accessing a mar- ket to buy basic items. Among the 22 percent of respon- Half of people who rented homes had either not dents who reported that someone in their family had paid  their  rent (47 percent) or paid  it  only partially had to access health services in the past week, 92 per- (2 percent). People who had lost their job, were tempo- cent were able to do so.  rarily absent from their job, or lost wages/earnings were less likely than those who were economically active to have paid rent in full. P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 5 Figure 1. Effect of labor market shocks on ability to meet basic needs 74 67 64 62 61 61 56 46 47 40 37 33 33 26 16 Worried will run out of Ran out of food or money Rent paid in full food in the past 7days in the past 7 days Percent of respondents Overall Lost job Temporary absence Lost wage/earnings Other economically active Coping strategies Reduction of preferred food consumption is one of Households that received remittances were slightly the main strategies respondents adopted to cope more food secure than those that did not, with 19 with the income shocks arising from the labor market percent running out of food in the last seven days losses. The share of respondents who reported having (versus 28 percent among people who did not receive reduced their consumption of preferred food in the past remittances). Among households that did not receive seven days was 69 percent among people who had lost remittances, 57 percent had reduced consumption of jobs, 64 percent among people who faced any kind of preferred foods and 65 percent worried about running labor market–related deterioration, 59 percent among out of food in the last seven days. Among households people who were temporarily absent from work, and 56 that received remittances, these figures were 63 percent percent among people who faced earning losses.4 and 68 percent, respectively. 4 The economically active population is defined as individuals of working age (15–64) who are either currently participating in the labor force (based on a recall period of seven days before the interview date) or worked at any time in 2020. Among the economically active in 2020, the fol- lowing categories were combined to define individuals who faced any COVID–related deterioration: lost jobs; temporarily absent from work; lost wages or earnings, irrespective of current work status; switched jobs; not searching for work (out of labor force) because of COVID; and looking for work but do not expect to find it within the next month (from the date of interview). P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 6 Figure 2. Prevalence of food insecurity a. Reduction of preferred food in last 7 days, b. Food insecurity in households that did by job market status and did not receive remittances Worried will run out 62 Overall 56 of food in the past 65 7days Lost earning/ wages 56 Reduced consumption 51 of preferred food in the past 7 days 57 Temporarily absent 59 Ran out of food 19 Deterioration in or money to buy food labor outcome 64 in the past 7 days 28 0 20 40 60 80 Job lost 69 Percent of respondents 0 20 40 60 80 Households received remittance Percent of respondents Households did not receive remittances Nearly half of respondents (48 percent) reported Subsistence activities also played a role—albeit a lim- that they would borrow money from family if they ited one—as an informal safety net during the COVID- needed to meet a large expense. Other options 19 crisis. The share of people engaged in subsistence included using savings (11 percent); borrowing activities rose from 47 percent before the lockdowns to from a formal institution (banks, Non-Government 62 percent after the lockdowns. Among people who had Organizations/Community Based Organizations, sav- lost jobs, 55 percent were involved in subsistence activ- ing groups) (11 percent); borrowing informally (from ities post-lockdown, up from 37 percent in the pre-lock- moneylenders or shopkeepers) (8 percent); and mort- down period. People who were temporarily absent from gaging or selling productive assets (8 percent). Notably, their jobs were 28 percentage points more likely to be 13.8 percent said they did not have any resources to involved in subsistence activities post-lockdown and fall back on. The share of respondents who would people who were still employed but faced earnings/ mortgage assets was higher among people who had losses were 11 percentage points more likely to do so lost jobs (12 percent) or were temporarily absent from than people who faced neither. As expected, reliance on work (16 percent). subsistence activities was highest among people who were unemployed and not looking for jobs (72 percent) at the time of the interview. P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 7 Figure 3. Coping mechanisms a. Mechanisms to meet unexpected large expense b. Subsistence activities 14 47 12 Overall 62 Overall 8 50 56 8 Inactive 57 72 13 in 2020 18 13 Lost job 8 Employed in 40 52 57 12 January 2020 77 8 45 Temporarily 7 Economically 56 11 active 41 absent 46 16 42 Lost wages/ 53 16 earnings 19 40 Lost wages/ 15 earnings 60 Temporarily 34 8 absent 61 54 10 Deterioration 13 37 in labor 11 Lost job 55 outcomes 50 42 12 0 20 40 60 80 100 Percent of respondents Percent of respondents Own savings Formal loans Before lockdown Informal loans Pawn assets After lockdown Borrow from family and friends Last 7 days Assistance Assistance Received During the Pandemic A mere 2 percent of respondents reported having When asked about the types of assistance that received assistance from any additional or new gov- would be most useful, respondents identified work/ ernment program after March 2020—and just 11 per- job programs (28 percent), distribution of food and cent reported receiving any assistance since the onset basic needs (22 percent), and cash transfers (20 per- of the pandemic. This assistance came almost entirely cent). Distribution of food, masks, and sanitizers were from preexisting categorically targeted social assis- prevalent; cash transfers, distribution of medicines and tance programs, such as the Old Age Allowance (which masks, and COVID-19 testing centers were not (figure accounted for 50 percent of all assistance), the Single 4). Distribution of food; basic supplies; and medicines, Woman Allowance (24 percent), and the Disability masks, and sanitizers exceeded respondents’ expecta- Allowance (7 percent).  Existing social protection pro- tions. In contrast, cash transfers and COVID-19 testing grams have thus not been effective in protecting the centers fell short of expectations, and help with agricul- poor in Nepal. The main component of social assistance tural inputs, small business support, and rent relief had in Nepal—social pensions—is not as readily amenable not started in the respondents’ localities. to the delivery of assistance in times of crisis, as for instance, in-kind or cash transfers. P O L I C Y B R I E F : A SS I STA N C E A N D CO P I N G ST R AT E G I E S I N 2 0 2 0 D U R I N G COV I D - 1 9 8 Figure 4. Types of assistance programs Work/job programs 28 0 Distribution of food/basic needs 22 42 Cash transfer 20 6 Agricultural inputs 6 0 Small business support 4 0 3 Health checkup 0 Loans/interest waiver 3 0 COVID testing centers 2 1 Rent relief 2 0 Distribution of medicines,masks, other materials 2 7 Transportation for workers/farmers 2 0 0 5 10 15 20 25 30 35 40 45 Assistance that would be most helpful for households Assistance program started in area Scaling up and Monitoring Future Assistance  A critical constraint in providing immediate relief is Data that can support the continued monitoring of the lack of preexisting policy mechanisms that could welfare of at-risk groups will be required as a criti- be scaled up quickly to reach groups that were likely cal first step to support inclusion. Ideally, the national to be affected. Previous studies on welfare, shocks, and statistical system should conduct such tracking and use coping in Nepal have highlighted the need for diverse it to inform policy actions. The COVID-19 crisis can pro- types of assistance to reach vulnerable groups, such as vide the impetus for modernizing the way official statis- the rural poor, through, for example, instruments such as tics are produced, disseminated, and used. Piloting and subsidized rainfall insurance and public works employ- then adopting new phone-based survey technologies to ment guarantees. There is an urgent need to identify monitor the crisis would help develop more agile crisis new mechanisms that can deliver relief and contribute monitoring systems. to a more inclusive recovery process in Nepal. The rela- tively high penetration of mobile phones (96 percent) and access to banking services (68 percent) can provide entry points to innovative delivery mechanisms, especially if investments in digital infrastructure increase.