The Labor Market Implications of Restricted Mobility during the COVID-19 Pandemic in Kenya : Evidencefrom Nationally Representative Phone Surveys

The COVID-19 pandemic affected people’s livelihoods in many ways, particularly indeveloping countries. This paper examines the degree to which recovering mobility levels impacted labor marketoutcomes in Kenya over the course of the pandemic, starting from May 2020 until June 2021. It uses an instrumentalvariable approach to identify the causal impacts of mobility reduction induced by policy changes on labor marketoutcomes. The findings show that a 10 percent recovery of mobility led to a 12 percentage points increase in laborforce participation and a 9 percent points increase in household members being employed. At the same time, a 10percent recovery of mobility caused an increase of 11 wage hours per week (formal and informal). Among the factorsinfluencing self-reported mobility-reducing behavior, trust in the government’s ability to deal with the pandemiccorrelates with less self-reported mobility reduction, while people who knew someone with an infection tend to reducemobility less. Finally, countrywide policy stringency levels clearly reduce self-reported mobility. Given thedemonstrated adverse impacts of reducing mobility on economic indicators, the government should explore optionsto limit the economic fall-out while protecting citizens from infections, for example, by using partial orgeographically constrained lockdowns.