maintain workers depends on firms’ ability to sustain their liquidity and solvency. Using World Bank Enterprise Survey data, Bosio et al. (2020) find that firms have suffered liquidity shortages regardless of their age, size, and productivity levels. Alfaro et al. (2020) model the impact of the direct supply shock caused by lockdowns as well as demand shocks through consumer demand, supply chain disruption, and the overall aggregate demand effects on the Colombian labor market. They predicted that the crisis would result in 24 percent of jobs being lost and total wage income losses of 17 percent. They showed that 56 percent of jobs are at risk, with 67 percent at risk as the crisis deepens due to cumulative liquidity effects on firms (with losses relative to the 2019 baseline). A forthcoming paper (Buba et al., 2021) analyzes cross country differences in jobs outcomes at formal firms using firm survey data and establishes that at least in the short term, countries with more highly regulated labor markets retained more formal jobs, that countries with more stringent lockdowns had greater job losses, and that on average countries with supportive policies have been more able to preserve these jobs.

Despite this rich literature on the labor market impacts of the pandemic, there have been limited studies that seek to empirically identify the factors that matter most in determining the level and distribution of jobs lost. This paper contributes to filling this gap.

# **3. Context, Data and Methodology**

- 3.1 Data

We use linked firm-level and labor force survey data to empirically analyze job loss in formal private firms for both Jordan and Georgia. Firm data are provided by the COVID-19 Follow Up World Bank Enterprise Surveys (CFUWBES) for these two countries. These are surveys of companies included in a recently completed preCOVID World Bank Enterprise Surveys (WBES) to measure the impact of the COVID-19 pandemic on the private sector. We analyze only the loss of a “permanent” job, because a firm’s workforce level is the only jobrelated outcome that is effectively captured in the CFUWBES, and a job loss represents a more costly outcome for workers than other effects, such as reduced hours, wages, or temporary furloughs. In addition to firms’ permanent workforce adjustments, the CFUWBES questionnaire includes variables capturing the operations of the business, sales, liquidity and insolvency, firms’ technological adaptations, their expectations and uncertainty about the future, and public support received during the crisis. The WBES sampling approach is from the population of all registered establishments with five or more employees in manufacturing, retail, and other services sectors, designed to represent core productive sectors typically owned and operated privately. It does not include financial services, real estate and rental activities, or public service providers. Therefore, while it represents a major portion of the formal private sector, it does not capture all formal private sector employers. For Jordan, the baseline ES contains a total of 601 firms conducted from December 2018 to November 2019. The CFUWBES wave 1 (henceforth CFUWBES1) was conducted from July to August 2020, and the CFUWBES wave 2 (CFUWBES2) data was collected from November 2020 to January 2021. Both rounds of CFUWBES use the same sample as the most recent WBES to construct a panel. For Georgia, the baseline WBES contains a total of 701 firms interviewed between March 2019 and January 2020. The same firms were re-contacted in June 2020 for Wave 1 and in October/November 2020 for Wave 2.

In addition, we use recent labor force surveys to link firm data and predict potential effects on workers. For Jordan, we use the Jordan Labor Market Panel Survey (LMPS) 2016, which collects labor market information 7