Does informality increase the spread of COVID-19 in Africa? A cross-country examination

ABSTRACT

The informal economy absorbs a large share (more than 80%) of the labour force in sub-Saharan Africa (SSA). We examine whether a high level of informality tends to exacerbate the spread of the COVID-19. Using publicly available data for a cross-section of 46 SSA, we find evidence that confirms this hypothesis.

KEYWORDS:

• Informality
• COVID-19
• Africa
• disease spread

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Although the initial cases of COVID-19 occurred in sub-Saharan Africa in late February, it is only around 15 March 2020 that the number of new cases started rising and the phenomenon became increasingly intense.

² Since the data used in this study are cross-sectional, our best strategy is to allow cross-country variations in informality to come ahead of the observed cross-country variations in COVID-19 spread, in order to break potential simultaneity between the two variables. With time series or panel data, the ideal approach would be to estimate the model and use a Granger causality-type test to confirm the direction of causality. We thank an anonymous reviewer for pointing this out.