Candle in the Wind?: Insights from COVID-19 Emergency Cash Transfers to Informal Sector Workers in Sierra Leone

This paper takes stock of the insights and learnings from a COVID-19 emergency cash transfer program that was administered to vulnerable informal sector workers in Sierra Leone. It starts by reviewing relevant examples of cash transfer programs that were instituted in response to the COVID-19 crisis. It then describes the context, intervention, and data of the emergency cash transfer program, before presenting a quasi-experimental analysis of the emergency cash transfer’s potential impacts on various measures of economic security and subjective well-being of households with urban informal sector workers. The analysis is conducted by matching administrative data to survey data and using program eligibility criteria and inverse probability weights to identify the short- and medium-term relationship between a one-off US$135 cash transfer and various labor market, food security, human capital, and subjective well-being outcomes for recipient and nonrecipient households of the emergency cash transfer. The analysis finds a positive potential impact of the transfer and the number of hours worked as well as employment in the medium term. It also finds that program beneficiaries report higher chances of their main income increasing or staying the same compared to nonbeneficiaries. The positive correlation between the transfer and income disappears over the medium term, perhaps suggesting that one-off transfers work best to cushion vulnerable self-employed households and informal wage workers in the short term but do not impact medium-term employment or income.