# **1. Introduction**

The COVID-19 pandemic has caused unprecedented global employment losses of 114 million jobs worldwide in 2020 compared to the previous year (ILO, 2021). Kenya, as well as other parts of the world, has been strongly affected as restrictions on personal mobility have severely disrupted economic activities.<sup>2</sup> Although losses have been alleviated through welfare support programs, hard-hit groups remain: children, youth, women, low-paid and low-skilled workers (FAO, 2020; Hill & Narayan, 2020; Chetty, Friedman, Hendren, Stepner, & Opportunity Insights Team, 2020; ILO, 2021; Josephson, Kilic, & Michler, 2020).

Displaced populations are particularly vulnerable as they arrive in host destinations without initial assets or established business connections and often lack access to official documentation to establish themselves in formal markets or access formal financing. Refugees living in Kenya face working and movement restrictions which severely impact their ability to participate in the labor market and limit their livelihood opportunities (Zetter & Ruaudel, 2016). Refugees were experiencing high levels of poverty, food insecurity as well as low school attendance and labor market participation rates.<sup>3</sup> Yet despite their large numbers and contributions to the local economy, quality data on refugee communities is scarce.<sup>4</sup> In particular, while qualitative assessments or cross-sectional quantitative analyses have been conducted in the past (MacPherson & Sterck, 2021; Sterck & Delius, 2020; Alix-Garcia, Walker, Bartlett, Onder, & Sanghi, 2018), reliable longitudinal studies on refugee job market outcomes are not readily available, severely restricting the ability to assess the impact of a crisis like COVID-19 on refugees.

This study uses the Kenya COVID-19 Rapid Response Phone Survey (RRPS) to investigate the socioeconomic implications of the COVID-19 pandemic on labor market outcomes of urban national and refugee communities in Kenya. Refugees in Kenya live in densely populated refugee camps inhabiting more than 200,000 inhabitants and in urban areas, primarily in Nairobi. Available job-market opportunities and labor market dynamics are therefore comparable to urban nationals rather than rural nationals who predominantly engage in agriculture, an economic activity refugees cannot pursue as they do not have the legal right to own land. From May-June 2020 until April-June 2021 we interviewed 6,343 households consisting of both refugees and Kenyans over five survey waves. Our data is unique in at least four dimensions: i) it leverages the high cell phone penetration and coverage throughout the country, including the refugee communities, to reach households during lockdowns when face-to-face interviews are impossible to conduct;<sup>5</sup> ii) its longitudinal nature allows not only to assess the first order impact of the COVID-19 shock but also its longer-term implications for recovery; iii) interviews cover refugees and nationals over the same period and are

> 2 Khamis et al. (2021) estimate that the work-stoppage rate in Kenya reached up to 62 percent compared to before the pandemic.

> 3 Results from socioeconomic surveys carried out by UNCHR and the World Bank in Kalobeyei settlement in 2018 and in Kakuma camp in 2019 show that 65 percent of Kalobeyei refugees and 68 percent of Kakuma refugees are poor, while at least 7 in 10 of them are highly food insecure (UNHCR & World Bank, 2020; UNHCR & World Bank, 2020).

> 4Kenya hosted around 530,000 refugees in August 2021 which makes it the second largest hosting country in Africa after Ethiopia (UNHCR Kenya, 2021). Alix-Garcia et al. (2018) estimate that the presence of Kakuma refugee camp has increased demand for low-skilled jobs and wage labor and led to favorable price changes for local producers which on aggregate contribute to a 25 percent increase in household consumption in areas in close proximity to the camp compared to surrounding areas.

> 5 Eighty-six percent of Kenyan households own a mobile phone (KNBS, 2016). Among refugees, 69 percent of Kakuma refugees own a mobile phone (IFC, 2018) and 99 percent report having access to a mobile phone (Hounsell & Owuor, 2018). Access is harder to estimate for urban refugees living in Nairobi, as no official survey numbers are available (Eppler, et al., 2020). However, given the high access to technology in the capital, the mobile phone ownership share is expected to be at least at the national average level (Eppler, et al., 2020).

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