The labor market implications of restricted mobility during the Covid-19 pandemic in Kenya: Evidence from nationally representative phone surveys in Kenya.

We use an instrumental variable approach to identify the causal impacts of mobility reduction induced by policy changes on labor market outcomes. We find that a 10% recovery of mobility leads to an 11% increase of labor force participation and an increase of 7% of household members being employed. At the same time, a 10% recovery of mobility causes an increase of 12 wage hours per week (formal and informal) with wage hours in urban areas increasing 3.2 hours per week. Among the factors influencing self-reported mobility and, thus, nationwide mobility levels, the trust in the government’s ability to deal with the pandemic correlates with more self-reported mobility, while employed individuals tend to restrict mobility more. Finally, country wide policy stringency levels clearly reduce self-reported mobility. Given the demonstrated adverse impacts of a lockdown on important economic indicators, Governments need to explore options to limit the economic fall-out while protecting citizens from infections, e.g. by using partial or geographically constrained lockdowns.