The Impact of Covid-19 on Household Welfare in the Comoros : The Experience of a Small IslandDeveloping State

This paper investigates the causal impact of a Covid-19 lockdown policy on the Comoros'shousehold welfare, poverty, and labor market outcomes. The identification strategy uses the national governmentlockdown policy implemented to curtail the unexpected outbreak of Covid-19. The lockdown policy coincided with the2020 Harmonized Survey on Living Conditions of Households data collection, lending itself to a quasi-naturalexperiment in which households that were interviewed before the lockdown policy fall into the control group, while thosethat were interviewed after the lockdown fall into the treated group. The paper explores the impact of the Covid-19using descriptive regression analysis and estimates the causal impact using matching techniques. The analysis findsa reduction in household expenditure, increased poverty, and a reduction in the likelihood of employment. Investigationof differential impacts along the expenditure distribution finds larger impacts at the top of the distribution,suggesting that Covid-19 may have reduced inequality, although the poor were also negatively affected. Theevidence also suggests that the ability to use assets as a coping mechanism was limited. In a context of limited safetynets and government interventions, stringent lockdown policies appear to increase the vulnerability of the poor.