Impact of Safety Nets on Household Coping Mechanisms for COVID-19 Pandemic in Malawi

Abstract

Background: Covid-19 pandemic induced various shocks to households in Malawi, many of which were failing to cope. Household coping mechanisms to shocks have an implication on household poverty status and that of a nation as a whole. In order to assist households to respond to the pandemic-induced shocks positively, the government of Malawi, with support from non-governmental organizations introduced Covid-19 Urban Cash Intervention (CUCI) and other safety nets to complement the existing social protection programs in cushioning the impact of the shocks during the pandemic. With these programmes in place, there is a need for evidence regarding how the safety nets are affecting coping. Therefore, this paper investigated the impact that safety nets during Covid-19 pandemic had on the following household coping mechanisms: engaging in additional income-generating activities, receiving assistance from friends and family; reducing food consumption; relying on savings; and failure to cope. Methods: The study used a nationally representative panel data from the Malawi High Frequency Phone Survey on Covid-19 (HFPS Covid-19) and complemented it with the fifth Integrated Household Panel Survey (IHPS), also known as living standards measurement survey. Five Random Effects Probit Models were estimated, one for each coping mechanism. Results: Findings from this study indicated that beneficiaries of safety net programs were more likely to rely on remittances from friends and family than the people who had no safety nets. Furthermore, the safety net recipients were less likely to reduce food consumption or rely on savings than the non-recipients. Despite the interesting findings, we also noticed that safety nets had no significant impact on household engagement in other income-generating activities in response to shocks. Conclusion: The results imply that safety nets in Malawi during the Covid-19 pandemic had a positive impact on consumption and prevented the dissolving of savings. Therefore, these programs have to be scaled up, and the volumes be revised upwards.