Income Support Programs and COVID-19 in Developing Countries

The COVID-19 pandemic has threatened the livelihoods of the most vulnerable households in developing countries. In response, several countries have launched income support programs (ISPs). We evaluated the likely impact of these programs on the weekly growth rate of confirmed COVID-19 cases and deaths across 62 developing countries between January and December of 2020. Event study results suggest that implementation of ISPs reduced the weekly growth rate of cases and deaths. A heterogeneity analysis found that ISPs seemed effective in reducing the growth of cases and deaths related to COVID-19 in middle-income countries and the growth rate of cases in low-income countries as well as those countries with high informality in the labor market. Difference-in-difference estimates using the Callaway and Sant’Anna (2020) estimation strategy indicated that ISPs decreased the COVID-19 case growth rate by 12.1 percentage points and the death growth rate by 22.9 percentage points.