In April 2020, when the lockdown measures were in place, the Power and Participation Research Center (PPRC) and the BRAC Institute for Governance and Development (BIGD) teamed up to launch a rapid response telephone survey on the immediate impact of COVID-19 on household livelihoods and well-being.1 The survey (Phase I) used telephone databases of respondents from previous surveys in urban slums and the rural poor. Our real-time research evidence on the economic impact of COVID-19 during the early phase of the pandemic generated a lot of attention. 1PPRC-BIGD Rapid Response Research: Livelihoods, Coping and Support during the COVID-19 Crisis, April, 2020, PPRC and BIGD, Dhaka.
1 Introduction
- Limitations
- Survey Mode
- Sampling and Survey Instrument
- Analysis
From the rural data set, an additional 2,000 households were randomly selected from the remaining benchmark survey samples. The questionnaire mainly covered segments about the impact of the COVID-19 crisis on their survival, coping mechanisms, and nutrition. For the rural samples, the weights were the ratio of the nationally representative BIGD sample number to the number of our surveyed households for each income group because the sample was drawn equally from each nationally representative survey group.
2 Methodology
Regional Profile
Of the 7,638 successfully interviewed households, 56% are from urban slums and municipalities, while 43% are from rural Bangladesh (Figure 1).
Demographic Profile
Economic Profile .1 Poverty Classification
- Pre-COVID (February) Income Status
- Main Source of Income
3 Respondent Profiles
Occupational Profile
We classified respondents into four income categories based on reported per capita income for February 2020 (pre-COVID): Extremely poor: Households with monthly per capita income below or equal to the lower poverty line are categorized as extremely arm. For example, a rural household in Barishal division is categorized as extremely poor if its per capita income in February 2020 was less than BDT 2,264; Similarly, a rural household in Chattogram division has been categorized as extremely poor if its per capita income was less than BDT 2.58. Similarly, the households living in urban areas are classified as extremely poor based on the monthly per capita income of the urban areas of the division in which they live.
Moderately poor: Households with monthly per capita income above the lower and below or equal to the upper poverty line were categorized as poor. The then director of the Household Income and Expenditure Survey (HIES) informed us that the average per capita income in the HIES in 2016 was BDT 3,040, which is an inflation-adjusted BDT 3,872 BDT in 2020. So the vulnerable non-poor in this survey are those who whose reported income as of February 2020 was between the upper poverty line and the median income.
Non-poor: We categorized the households with a monthly per capita income above the median income (i.e. BDT 3,872 for 2020) as non-poor. The proportion of extremely poor was highest (68%) in the CHT sub-sample, followed by the rural sub-sample (44%) and the urban sub-sample (33%). Overall, almost 40% of the main income earners were from informal occupational groups—rickshaw pullers, domestic workers, daily wage earners.
Furthermore, approximately eight percent of the sample households had agriculture as their main source of income. 1.21% of households reported dependence on aid/external assistance from formal (government, NGOs, etc.) and informal (relatives/friends/family) sources as the main source of income. Extreme poor: households with per capita monthly income below or equal to the lower poverty line are categorized as extreme poor.
Food Expenditure
Mobility Trends
Post-Migration Livelihoods Adjustment
10 Mobility Dynamics
Health Awareness
Optimism/Pessimism on Near-term Prospects
Perception about Lifting “ Lockdown ” / General Holiday
11 Social Perceptions ofPandemic Realities
Resilience Amidst Governance and Policy Conundrum
A notable feature of Bangladesh's response to COVID-19 is its fragmented approach to pandemic control and a very early resumption of economic activities. For its part, society also had a nuanced response, which was to some extent influenced by the nature of the official response. The widespread sharing of get-well advice on social media reinforced the popular psychology of ignoring testing and hospitalizations except in specific circumstances.
All this played into a qualitative change in popular psychology from an initial short spell of panic of the unknown to the removal of fear and the adoption of a relatively early decision to ignore the pandemic and resume economic activities wherever possible . On the other hand, both the official and social response to the pandemic have served on the one hand to highlight resilience, but the governance and policy conundrum has also exposed the system and population to critical vulnerabilities in development. After the strictest lockdown measures were lifted, it was natural to expect a recovery in economic activities.
It found that the livelihoods of the vulnerable urban and rural population had indeed recovered significantly in June compared to April, but this was mainly in terms of finding work. Despite the widespread income shock, only 39% received any form of aid, and for those who did, the amount covered an average of only four percent of their estimated income loss due to the pandemic. The majority of the surveyed households used their savings to cover their food needs from the beginning of the pandemic, and the use of loans was also quite high, although much lower than the previous one.
Expenditure on non-negotiable non-food items is piling up and putting additional pressure on the finances of vulnerable people, especially in cities.
Addressing the ‘New Poor’
The official response was characterized by four factors: first, a poorly enforced two-month semi-lockdown; second, strict enforcement. The tilt towards livelihoods saw policy boosts in 'fits and starts', first a stimulus package for the politically powerful and leading export sector ie. firstly, there was a limited and rather uneven acceptance of two health protocols – masks and hand washing, more so in urban centers than in the villages.
Second, there was varied enforcement of mobility restrictions at the local level depending on the proactive nature of community leadership. Third, after an initial rush for testing and hospitalization, popular psychology determined that testing was not necessary given the widespread reports of false tests, nor was hospitalization given the real experience of poor service standards and exorbitant costs. Still, a significant percentage has remained out of work, and for those who managed to continue their profession or find something new, incomes have remained much lower than pre-COVID levels.
As a result, we also found increasing internal migration, more likely from more productive cities to the less productive rural areas. All of the above factors increase the financial vulnerabilities of many people, if not most people, and create a long-term poverty trap.
Urban Social Protection
Timeline of Responses
The ‘Other’ Crisis: Confidence and Morale
12 Analytical Takeaways andPolicy Lessons
- PPRC-BIGD 3 rd Survey, March 2021
- Household Realities one year into Covid-19 Crisis
- Income
- Employment
- Food security
- Migration
- Non-food expenditure burdens on urban poor
- Savings depletion and debt accumulation
- Marginality of social protection
- Predicaments of the ‘New Poor’
- Conclusion
In our April Phase I survey, we found that a large majority of households in the vulnerable non-poor category in the pre-Covid economy fell well below the poverty line, causing a rise in the population of the 'new poor' —people who were impoverished by the pandemic. As a result, the proportion of the 'new poor', around one-fifth of the population, barely budged from April. The regression of the non-poor vulnerable to poverty will be a major impediment to Bangladesh's recent progress in poverty reduction.
Shortly after the end of the third round, Bangladesh was hit by a second wave of the pandemic. 41% of the respondents had to change profession (Figure 4) but this was not just the dynamics of the labor market. At the end of a crisis year, net reverse migration from urban poor settlements was 9.8%.
Further disaggregation shows that such reverse migration was not only limited to the early phase of the crisis. One of the important drivers of reverse migration was the non-food expenditure burden on the poor. Two important findings from the survey are about the savings and debt status of the households.
By using the rate at which the 'vulnerable non-poor' in the PPRC-BIGD study slipped below the poverty line as a weight, the study was able to arrive at a national estimate of the 'new poor'.
13 Postscript : Poverty Dynamics and Household Realities One year into
It was one year of the Covid-19 crisis that allowed PPRC-BIGD to assess how household realities and poverty dynamics evolved after the initial economic shock and subsequent recovery efforts. Completion of the third survey created a valuable panel database surveying the same set of households at three points in time during the pandemic – first, in April 2020 immediately after the first lockdown, second, in June 2020 which was an early period in the recovery and thirdly, in March 2021 which was a later period in the recovery process within the pandemic timeline. Average household income one year after the crisis was still 7% below pre-covid level (Figure 1).
Of those who had been employed in the period before covid, 8% still remained unemployed one year after the crisis. Results at the end of one year of the crisis show that 27.3% of poor urban households had temporarily migrated, of which 17.5% had returned. The financial impact of the pandemic on households must be measured not only through their access to income and employment, but also how their internal coping skills have fared.
While the economic impact of the pandemic has generally worsened poverty, the PPRC-BIGD Study has brought into focus a new reality of a significant number of households above the poverty line slipping back into poverty. The study first coined the term "young poor" in April 2020 to dramatize this new reality. In the pre-Covid period, they existed in the income bracket above the poverty line but below the median income and as such were labeled by the study as.
One year after the existential crisis of Covid-19, the policy lessons learned at the end of the second PPRC-BIGD survey in June 2020 have been reinforced.
