How Have Formal Firms Recovered from the Pandemic? : Insights from Survey and Tax Administrative Data in Zambia
This paper examines how formal firms have been impacted by and recovered from the pandemic, by drawing on two distinct but complementary data sources. This is the first attempt to use both survey and tax administrative data to measure the initial d...
| Main Authors: | , , , , |
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| Format: | Working Paper |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099435008162218175/IDU08b96ddd40efa404ccc0965d0675d0e7c380f http://hdl.handle.net/10986/37897 |
| Summary: | This paper examines how formal firms
have been impacted by and recovered from the pandemic, by
drawing on two distinct but complementary data sources. This
is the first attempt to use both survey and tax
administrative data to measure the initial decline and
subsequent recovery of firm sales and employment in a low-
or lower-middle-income country. The findings of three rounds
of follow-up surveys to a standard World Bank Enterprise
Survey completed immediately prior to the pandemic are
compared to information contained in the universe of
value-added tax and personal income tax returns filled by
firms during 2020 and the first half of 2021 in Zambia.
Despite substantial differences in terms of the breadth and
depth of these data sources, they show a very similar
pattern. The sales of formal firms recovered from the
pandemic far more strongly than their employment levels. By
July 2021, both the survey and tax administrative data show
that most firms experienced a complete recovery in sales,
while levels of employment worsened over the course of the
pandemic for many firms. Two key insights emerge from this
analysis. First, formal firms appear to have adjusted their
operations in a way that reduced their need for as much
labor to achieve the same (or higher) level of sales.
Second, if formal firms’ reduced reliance on labor persists,
lower levels of formal employment in low- and middle-income
countries may be a concerning consequence of the COVID-19
pandemic that lingers for years to come. |
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