conducted in the same modality, allowing for a comparison between both communities; iv) the survey is nationally representative of both the national and the refugee population.

Since few refugees were employed before the pandemic and most faced restrictions on their mobility and the types of work they could engage in much before COVID-19, we expected the influence of lockdowns on refugee labor outcomes to be less pronounced than for nationals. However, using a panel setup with fixed effects for waves and locations as well as controls for gender, age and educational attainment, we find that refugee outcomes significantly worsened during the pandemic. Even before the COVID-19 virus reached Kenya and lockdown restrictions were put into place, only 20 percent of refugees were employed or self-employed in agriculture or in household businesses. In contrast, the share of working Kenyan nationals was almost 43 percentage points higher, at 63 percent. After March 2020 and the onset of the pandemic, less than 1 in 10 refugees remained employed compared to 40 percent of nationals. When controlling for demographic characteristics and county fixed effects, the initial level-difference in employment between refugees and nationals remains large, at 31 percentage points (32 percent compared to 63 for nationals). After the initiation of a nationwide lockdown in March 2020, the employment share of both refugees and nationals dropped by a similar margin of approximately 36 percent such that even when refugees had the same educational attainment, were of the same gender and age and lived in the same areas as nationals, only 21 percent of them were employed in May-June 2020 as compared to 40 percent of nationals.

When initial restrictions were lifted later in 2020, refugees experienced a more stagnant recovery than nationals. While average hours worked for nationals remained on an upward trajectory from 11 to 23 hours between May-June 2020 and January-March 2021, average hours worked for refugees remained close to constant at a very low level (7 hours a week) until March 2021 and only improved afterwards. For household incomes, we observe a large and significant difference in income levels at the beginning of the pandemic which narrows in January-March 2021 but widens in April-June 2021. The different rates of recovery lead to a significant and widening difference in the household per capita income and the total number of hours worked towards the end of the panel.

These results cannot be explained by demographic and location differences, previous employment status, living in cities as opposed to camps or sectoral choice. This suggests there is a third, unobservable ‘refugee factor’ which inhibits recovery after a major demand-supply shock and therefore aggravates pre-existing vulnerabilities in times of need. In particular, components of the refugee factor which we cannot control for are the quality of education and training received, the special institutional framework which limits refugees’ rights to move, settle and work freely in Kenya, the restricted access to formal permits, documentation, and social safety-nets or variation in the provision of aid-distributions. Our results indicate that these unobserved characteristics translate to observed effective differences between refugees and nationals, which opens avenues for policy programs to level the playing field through inclusive evidence-based measures.

This study contributes to the emerging literature investigating socioeconomic impacts of the COVID-19 pandemic with special focus on labor-market impacts which remain underinvestigated in the African context as post-COVID-19 data is often scarce (Khamis, et al., 2021; 3