heavily hit by COVID-19.<sup>1</sup> The two-country comparison permits us to explore the possible generalizability of our evidence for quantifying likely job losses in other countries. We then suggest approaches for utilizing the results to predict job losses elsewhere.

Data limitations in developing countries make it impossible to provide a full accounting of risks to all jobs, even for these two economies selected in part for their relatively comprehensive data availability. Because relevant data on all employment types is lacking, we can only analyze the drivers of risk to permanent formal private sector (PFPS) jobs. These are jobs held full time and for longer than a year at a formal private company, as defined in the World Bank’s Enterprise Surveys (WBES). Informal work is a mainstay in middle income countries, can be a shock absorber when the formal sector experiences a downturn, and can also be impacted through demand side channels by the formal labor market. However, we cannot analyze the informal employers’ decision as we can for formal firms due to the lack of similar data. Moreover, PFPS jobs still represent an important share of all jobs in such countries and a much higher share than in low-income countries.<sup>2</sup> Jobs with formal firms are crucial to development as these jobs tend to be more productive, remunerative, and desirable, but are scarce relative to labor supply.<sup>3</sup> Informal workers and the self-employed likely share major risk factors with formal firms, but our findings are not necessarily generalizable to them.

Our main findings are as follows. First, shocks to labor demand predominated over supply side shocks to formal private sector jobs in both countries. These were primarily driven by disrupted input supply, COVIDrelated temporary closures, and other shocks to sales. For each week of closures due to the pandemic, approximately 1.2 percent of PFPS jobs were lost, and the overall responsiveness of jobs to changes in sales was very similar in the two countries – for each 1 percentage point of lost sales, there was an average 0.4 percent adjustment in PFPS workers in both countries. The occurrence of disruptions to the supply of inputs also had large and significant implications for sales and labor demand in both countries. In addition, infection risks to customers accounted for a large share of sales declines and therefore job losses, but only, according to our evidence, in Georgia.

Other determinants of labor demand had a much smaller impact. The ability to introduce digital solutions and support to firms had apparently little effect: Although the receipt of wage subsidies (firm reported) mitigated job losses in Jordan, they had small effects relative to the other significant factors, and there was no evidence 1World Bank high-frequency phone surveys (HFPS) show that the percentage of people working before COVID-19 (over age 18) no longer working at the time of the survey is higher for MICs (at 36 for UMICs, 32 percent for LMICs) than for LICs (at 25 percent), using a simple average across countries surveyed. Similarly, according to ILO (2021), using nowcasting methods “During 2020, lower-middle-income countries experienced the greatest losses in working hours, which stood at 11.3 per cent, well above the global average of 8.8 per cent.” However, a higher share of households in low- and lower-middle income countries experienced some income loss than in upper-middle and high-income countries (World Bank HFPS).

2 Given differential labor market frictions in the formal versus informal sectors, PFPS job losses may under-state job losses in the informal private sector early in the crisis but could overstate them later on or as economies improve. As in Alfaro et al. (2020), changes in employment are more rapid for informal firms and workers than for permanent formal sector employment, and these workers may have different profiles.

3 Although non-permanent workers for such firms could be more rapidly affected by the crisis, they represent a very small share of formal firm employees: 5-10 percent in Jordan (MENA Monitor Survey, 2021), and 3 percent in Georgia (LFS, 2019).

3