Experimental Evidence on Expanding Social Protection for Female Workers in Ethiopia

The researchers propose an experiment to study the impacts of expanding job-displacement insurance in a low-income country. A large garment factory in the Hawassa Industrial Park (Ethiopia) laid off 2,000 female workers in August 2022. As is common in low- and middle-income countries, these workers are eligible for a modest lump-sum severance pay but no unemployment insurance. Recent research suggests that many will be unable to secure another job quickly, food security will deteriorate, and many will return to their rural homes. In this project, the researchers will evaluate the impacts of providing (i) a monthly “income-support” scheme, which pays 60 percent of the worker’s wage for 5 months, irrespective of reemployment; and (ii) a single lump-sum payment of the same present value. The J-PAL-SPI grant will enable the research team to carry out additional follow-up surveys to study labor market and welfare impacts after the end of income support, and to test for full insurance against job loss.