Economic effects of the Covid-19 pandemic on the informal economy: who has fallen into poverty? 5 ECONOMIC EFFECTS OF THE COVID-19 PANDEMIC ON THE INFORMAL ECONOMY: WHO HAS FALLEN INTO POVERTY? Christoph Strupat 5.1 INTRODUCTION The Covid-19 pandemic has triggered a major global reces­sion(World Bank 2020). Widespread fear of contracting the virus, combined with strict policy measures to contain its spread have caused severe disruptions in livelihoods. To understand the full impact of the pandemic on low-income countries, it is necessary to consider the informal economy. People in informal employment are particularly vulnerable to the negative health and economic effects of external shocks, such as the pandemic. In addition, they constitute 90 per cent of all economic units in sub-Saharan Africa(Bonnet et al. 2019). Critical and diverse vulnerabilities are harboured in the informal economy:(i) the informally employed are more exposed to health and safety risks because of the poor health and safety conditions of their working environment, and limited access to public healthcare services;(ii) they face higher economic risks resulting from a combination of low income, high dependence on daily earnings for survival, and difficulties in accessing credit and social protection. Given these vulnerabilities, it is important to examine the economic impacts of the Covid-19 pandemic on the infor­mal economy and which types of households have fallen into income poverty. Furthermore, it is necessary to explore whether governments have responded well in supporting households working in the informal economy by expanding social protection. By answering these questions, it is possible to advise policymakers on the targeting of future economic support or social protection programmes in order to reduce pandemic-related income poverty more effectively. To identify the economic impacts of the pandemic, many research organizations working in low-income countries have switched to phone surveys. While phone surveys can be used to provide useful information about the ongoing situation, they cannot fully replace in-person surveys. The main limitations include sampling bias because they can only be administered to respondents with a working phone. This is, for example, a major concern in rural areas where only 40 to 60 percent of households have access to a phone(Wieser et al. 2020). Phone-owning households are likely to be more educated and wealthier, implying that rural phone surveys in low-income countries are likely to miss the most vulnerable rural households. In order to overcome the limitations of phone surveys, we conducted in-person surveys in the informal economies of Côte d’Ivoire and Ethiopia, right after the easing of lockdown measures. The purpose of this chapter is to present coun­trywide descriptive evidence from these countries in order to capture a complete picture of the economic impacts of the Covid-19 crisis on the informal economy and to show whether households have fallen into poverty, and if so, which types of them. Furthermore, the chapter explores whether the governments have also responded by supporting house­holds working in the informal economy and whether the response has helped to mitigate income poverty. 5.2 SPREAD OF COVID-19 AND LOCKDOWN MEASURES The first Covid-19 case was confirmed in Ethiopia on 13.3.2020. By 19.2.2021, there had been 151,016 cases and 2,260 deaths. The overwhelming majority of these cases and deaths have been in the capital, Addis Ababa. The first case was confirmed in Côte d’Ivoire on 11.3.2020. By 19.2.2021, there had been 31,825 Covid-19 cases and 185 deaths. The overwhelming majority of these cases and deaths have been in the capital, Abidjan. The first policy measures to limit the spread of the virus in Ethiopia were declared on 16.3.2020, just three days after the first confirmed case. The government of Ethiopia closed schools, banned all public gatherings and sporting activities, and encouraged physical distancing. Travelers from abroad were put into a mandatory quarantine, bars were closed until further notice, and travel over land borders was prohibited. Several regional governments imposed restrictions on public transportation and other vehicle movements between cities and rural areas. In particular, these restrictions were effective in Addis Ababa. The federal level State of Emergency was declared on 8.4.2020. Land borders were closed, except for cargo. Facemasks became compulsory in public spaces. Restrictions on cross-country public transportation and city transportation were also declared, for example, by limiting the carrying capacity of public transport providers to half their regular capacity. Some administrative regions took even stricter measures, closing restaurants and limiting movement between rural and urban areas. Unlike some other countries in the region, however, the country never went into a full 41