Resilience against the pandemic: The impact of COVID-19 on migration and household welfare in Tajikistan.

ABSTRACT

The COVID-19 pandemic is likely to have adverse effects on the economy through damage to migration and remittances. We use a unique monthly household panel dataset that covers the period both before and after the outbreak to examine the impacts of COVID-19 on a variety of household welfare outcomes in Tajikistan, where remittance inflows in recent years have exceeded a quarter of annual GDP. We provide several findings. First, after April 2020, the adverse effects of the pandemic on household welfare were significantly observed and were particularly pronounced in the second quarter of 2020. Second, in contrast to expectation, the pandemic had a sharp but only transitory effect on the stock of migrants working abroad in the spring. Some expected migrants were forced to remain in their home country during the border closures, while some incumbent migrants expecting to return were unable to do so and remained employed in their destination countries. Both departures and returns started to increase again from summer. Employment and remittances of the migrants quickly recovered to levels seen in previous years after a sharp decline in April and May. Third, regression analyses reveal that both migration and remittances have helped to mitigate the adverse economic outcomes at home during the "with-COVID-19" period, suggesting that they served as a form of insurance. Overall, the unfavorable effects of the COVID-19 pandemic were severe and temporary right after the outbreak, but households with migrants were more resilient against the pandemic.