Pathways of the Socio-Economic Impact of the COVID -19 Pandemic


The socio-economic impact of the COVID-19 epidemic operates through two distinct channels (see figure 1.1).
First are the direct and indirect effects of the sickness, which results from when an income-earner in the
household falls ill, the ratio of active members to dependents falls. The effects may be compounded by lost
earnings and taking care of the ill family member, or funeral costs upon death. Ill-health and limited resilience
capacities can create multiplier effects. One study of eleven (11) countries in Sub-Saharan Africa and South and
Southeast Asia found that in the absence of health insurance or other forms of universal health coverage,
responses to health shocks by people in poverty or near the poverty line commonly included distress sales of
assets and taking out loans from informal moneylenders, sometimes at exploitative rates.
5 Thus, the coronavirus
will be another source of impoverishment and reinforce existing factors, in turn limiting the ability of vulnerable
households to escape from – and stay out of – poverty.
6
Second are aversion behaviour effects resulting from the fear of catching the virus, which in turn leads to a fear
of association with others and reduces labor force participation, closes places of employment, disrupts
transportation, motivates some governments to close borders and restrict entry of citizens from afflicted
countries, and motivates private decision makers to disrupt trade, travel, and commerce by canceling
scheduled commercial flights and reducing shipping and cargo services. As depicted in the figure 1.1, this
aversion behaviour is through three sources: Covid 19 Environment Impact On Disease And Exposure Prevention Essay
‐ Governments impose bans on certain types of activities, as when the Government of China orders
factories to shut down or Italy closes most shops throughout the country or the Kenya Judiciary’s
suspension of court hearings across the country starting Monday, March 16, 2020 for two weeks in order
to allow for further consultations and to design appropriate measures to prevent the spread of the
coronavirus7which will have an adverse effect on the justice system.
‐ Firms and institutions (including schools and private companies) take proactive measures to avoid
infection. Business closures — whether through government bans or business decisions — result in lost
wages for workers in many cases, especially in the informal economy where there is no paid leave. After
the confirmation of the first case on 13 March 2020, Kenya introduced various restrictions such as the
entry of foreigners from countries that have confirmed coronavirus cases, working at home and closing
of learning institutions.8 Other restrictions have since been placed by 47 individual governors in their
respective counties. Barely a few days into the restrictions, small-scale traders in Nairobi were already
filling the effects of coronavirus-induced hardships

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