The potential saturation of hospitals with COVID-19 patients could exacerbate the existing disease burden and reduce the accessibility of health and social care services.
The suspension of mandatory school attendance could lead to a decline in student retention and quality of learning.
The effects of COVID-19 will be varied across several dimensions:
These differential impacts across demographic groups, economic activities and location will render different poverty impacts across the population. Families with children could experience an increase in poverty rates of 2 or more percentage points, in contrast with other demographic groups that will experience an increase of poverty rates below one percentage point. The more concentrated is the fall in economic activities associated with retail, transport, hospitality and entertainment, and in metropolitan areas or large city centers, then the higher increases in poverty in some federal districts. Preliminary estimates indicate that central and north-western federal districts would face proportional increases in poverty that can be twice as large as other regions of the federation.
These impacts can be partly compensated by changes in social protection programs announced in January 2020 (including an extension in the coverage of the existing means-tested child allowances for first and second child, and the introduction of a new means-tested allowance for children aged 3 to 7) as well as the extensions in social assistance and social insurance announced in March and April (more on these below). These policies aim at families with children, the unemployed and the small and medium enterprises which are the groups expected to endure a more severe impact of the crisis, in the short term.
Short-term impacts could be followed by different medium- or long-term consequences, including non-recoverable losses, such as learning deficiencies at critical ages, aggravated chronic health conditions, permanent job losses, or small business bankruptcies. Smaller cities and rural areas may suffer the spread of the virus several weeks later and may have to confront the disease with fewer medical resources. Similarly, industries not initially affected, such as agriculture and manufacturing, could be affected in later stages if disruptions in internal logistics, international trade, or financial conditions make the resumption of full production difficult. Finally, fatigued health services may have to prepare for a future of increased demand due to delayed treatments or even a resurgence of virus infections.
The social protection policy to confront the pandemic needs to devise and implement measures that consider the different impacts—demographic, economic, locational, and intertemporal—of the crisis. A failure to provide social protection could lead to significant increases in poverty and vulnerability, societal tensions, and destabilizing unrest.
As of April 17, 2020, a total of 133 countries had introduced or adapted social protection and jobs programs in response to COVID-19. Among classes of interventions, social assistance or noncontributory transfers were the most widely used (352 measures), followed by actions in social insurance (134) and supply-side labor market programs (78).
Within social assistance, cash transfer programs remain the most widely used intervention by governments (34.2 percent) among total social protection measures.
Cash transfers represent 22 percent of monthly GDP per capita, ranging from 36 percent in low-income countries to half of that share (18 percent) in upper-middle-income countries. Regionally, North America and Europe and Central Asia have the most generous benefits (27 percent), almost double that of Latin America and the Caribbean (16 percent). Nearly 622 million beneficiaries are specifically being supported through COVID-related introductions, expansions, and adaptations of social assistance programs.
Within social insurance, paid sick leave and unemployment benefits are the most frequently adopted measures, with 29 percent and 28 percent, respectively. Sick leave is present in such countries as Algeria, El Salvador, Finland, and Lebanon. Unemployment benefits are reported, for example, in Romania and South Africa. Deferring or subsidizing social contributions is observed in Montenegro, Germany, and the Netherlands, among other countries.
Labor market interventions continue to be an important area of action, especially in the form of wage subsidies. Wage subsidies account for 61 percent of the global labor market portfolio, with programs being implemented in Jamaica, Kosovo, Malaysia, and Thailand. Activation measures (worker training) are also being considered in Bosnia and Herzegovina, China, and Romania, among other countries.
The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response. The Europe and Central Asia region will be supported by US$486 million.
Cash transfers (conditional and unconditional)
Utility and financial obligation support (waiver/postponement)
In-kind food/voucher schemes
Cash for work
Universal one-off cash
Paid sick leave
Social security contributions (waiver/subsidy)
Health insurance support
Labor regulation adjustments
Activation (training) measures
Shorter work-time benefits
The World Bank has observed the following social protection and labor-related responses to the negative impacts of COVID-19 globally:
In the short term, additional measures to be taken in response to the COVID-19 pandemic may include:
Mid-term measures may include:
Last Updated: May 04, 2020