Impact of the COVID-19 pandemic on the hours lost by self-employed racial minorities: evidence from Brazil

Drawing on minority enclave theory and resilience theory in entrepreneurship, we test whether, with the onset of the COVID-19 pandemic, the self-employed lost more hours than the employed and whether traditionally disadvantaged self-employed racial minorities faced harsher penalties in the form of reduced hours of work. Though spatially concentrated ethnic minority colocations could improve business outcomes in the non-crisis period, with the pandemic affecting all the members in the enclave, the very dependencies in minority enclaves could be a liability. Using a large-scale survey during the COVID-19 pandemic conducted by the Brazilian government, we draw on a one-to-one nearest neighbor matched pair sample of 19,626 employed (public or private sector) and self-employed individuals, and control for industry-sector-interview-location fixed effects. The results show that self-employed people, compared to employed, reported a greater loss of hours. At the sample level, black self-employed people on aggregate lost 9,051 hours per month, and mixed race self-employed people on aggregate lost 27,880 hours per month. The disproportionate loss of work hours by the self-employed from racial minority groups during the COVID-19 pandemic in a developing country context calls for a closer examination and assessment of the long-term impact of COVID-19 on racial minorities.