Social impact of COVID-19 pandemic on vulnerable populations in Romania Covering period until January 2021 Overview of findings from high frequency March 2021 household and community surveys Package of qualitative and quantitative monitoring to assess social and economic impacts with an inclusion lens. Objective • To provide rapid pulse Community assessments of how the Firm qualitative COVID-19 crisis feeds into Pulse survey household living conditions, (phone (phone survey – survey – latest employment of household latest wave wave Jan ’21). Jul ’20) members, education of kids, Household access to healthcare services Pulse and behaviors; (phone survey – latest wave Jan ‘21) • To provide a snapshot of firm revenue and employment impacts. Tale of Two Romania Roma, low-work intensity households, large families, and individuals with lower education are more likely to be at risk of poverty Poverty rate by County 80 Roma-only Mixed settlement Very low (0-20%) 60 3+ children Employed, not Poverty rate (%) Some/no Roma employee Primary Single parent 40 Medium (45-55%) Women >64 yo Not employed Children Women Elderly Romania (24%) 20 2 adults, 1 child Prime-age adults Men Secondary Very high (85-100%) Employee 0 Tertiary Marginalized Family Work Gender Age Work Education areas composition intensity status • Following accession to the EU, Romania has seen high economic growth and declining average poverty rates. • However, poverty rates are the highest in the EU, and within Romania, substantial divergence in living conditions can be seen. • Poverty rates were six times higher in rural areas compared to cities in 2019, and in some Northeastern counties they are ten times higher than in Bucharest Source: “World Bank Group. 2016. Pinpointing Poverty in Romania. Poverty in Europe Country Policy Brief (LHS); Eurostat (2019), tables: ilc_li01, ilc_li02, ilc_li03, ilc_li04, ilc_li06, ilc_li07, ilc_pnp1. EU-MIDIS-II (2016) survey for marginalized communities. At risk of poverty is defined as having an income less than 60% of adult equivalized disposable income (RHS) Pandemic related restrictions on work and shifts in remittance patterns fed into income drops that have deepened existing inequalities Low wage workers most heavily affected through Proportion of individuals working in February who were able to employment channels during both waves continue working (%) ✓ In wave 1, lower earning workers saw 26% drop in working vs Working in Feb 2020 100% 8-9% drop for higher wage workers. ✓ In wave 2, employment, hours and income impacts have 95% been more limited, but greatest for lower-wage workers. 90% Most vulnerable populations more heavily affected: 85% ✓ Older and younger workers, women, those with non-standard contracts and self-employed more affected (quantitative data) 80% ✓ Roma populations and returnees also heavily impacted (qualitative data) 75% Restrictions Work stoppages were temporary for most… 70% Easing of Second Wave Pre-COVID on movement restrictions of COVID ✓ …but the longer-term impacts (and the persistence of the and work 65% impacts) of the persistent crisis appear to affect the most vulnerable the most. Rapid mitigating measures (technical unemployment, kurzarbeit) reduced impacts among formal workers – but left Lower wage Mid wage Higher wage All informal workers less protected. Source: World Bank Pulse Survey; March from Wave 1 and April – August from Wave 2. In wave 1, households in March were asked if they continued their work from February while in wave 2 respondents were asked if they worked for at least one hour at the end of February, April, May, June and in the last 7 days. Lower wage workers are those in the bottom 30% of the wage distribution, mid-wage are those in the middle 40% of the wage distribution while higher wage workers are those in the top 30% of the wage distribution. Government support moved quickly to reduce impacts of work stoppages. While initial measures targeted formally employed, additional measures aimed to reach more vulnerable pockets. Share of households reporting uptake of programs – May, August and Dec/Jan 2021 ✓ Support moved quickly through formal employment channels: 26% of households with working members in 25% February received support in August, compared to 6% without working members. 20% ✓ In August, better-off and urban households more likely to receive technical unemployment. By December, evened out 15% somewhat as additional measures targeting day laborers and seasonal workers reached more vulnerable groups. 10% ✓ Technical unemployment more likely received by lower and mid-wage earners. However, top-20 households have more workers - raising receipt of this support by these 5% households. ✓ Limited indication of expansion in social assistance 0% support –raising concern about gaps for populations that May-20 Aug-20 Dec/Jan 2021 don’t have access through employment-targeted programs. Bottom 40 Mid 40 Top 20* All Share of those at risk of poverty increased substantially in May and remained slightly above pre-crisis levels during the second wave. Increase in poverty breaks the trend of Percentage of the population at risk of Share of households finding it declining poverty rates in urban and rural areas. poverty; Experimental estimate hard to make ends meet Vulnerable households found it significantly 52% harder to make ends meet, an impact that has 43% 49% 48% persisted. 37% 43% 35% 34% 34% 32% 43% 29% 40% 39% Food security remains a concern in 25% 26% 35% marginalized rural areas and communities with 24% 29% large Roma settlements 22% 19% 17% 17% Rise in number of households in debt or taking loans Most common coping strategy is to reduce non- Februrary May August November January May July Oct/Nov Dec/Jan food consumption, but reductions in food Rural Urban All spending clear among poorer segments. Bottom 40 All Women are more vulnerable on the labor market, and they shoulder the increase in caring activities and household chores 0% 20% 40% 60% 80% 100% Women are disproportionately engaged in jobs that are being hit the hardest by the Residential care 95% COVID-19 outbreak – both as essential Social work 91% workers and in heavily impacted industries. Other personal service 81% Human health 78% Vulnerable women are more likely to be engaged in less secure forms of Education 77% employment and more likely to be Retail except motor vehicles 67% dismissed first (QS, 2020). Travel agencies, tour 62% operators Food and beverage service 58% Women already shouldered most of activities household chores and caring activities Libraries, museums 58% before the pandemic and the burden Accomodation 54% increased with school closure. Source: Eurostat LFS 2019 (lfsa_egan22d); World Bank computations. Note: Women ages 15 to 64. Health disruptions were mostly temporary but highlighted a preexisting urban-rural divide The first wave of the pandemic gave rise to delays in consultations, treatments and monitoring The crisis affected the provision of health services, especially in the most vulnerable communities (who have poorer underlying health status, more limited access to care, and less opportunity to practice social distancing) Preexisting low quality and utilization of health and social services, especially in rural areas. Gaps appear to have declined in COVID-19, driven by greater declines in urban areas for services that rural areas did not fully receive. Local initiatives taken to ensure continuous availability of medical services School disruptions affected all and have disproportionately affected children in rural areas and from poorer backgrounds. Struggling to keep up with grade expectations 60% 50% 18% Equitable access to Learning loss among 40% quality education was children is likely to affect Romania’s major those in poorer 30% 27% challenge before the households more – but 20% pandemic, with a strong not only. Share of 39% urban-rural divide and functionally illiterate 10% 18% socioeconomic students may increase by disparities (childcare, up to 10 percentage 0% Poorest 40% Better off 60% early school leaving, points (from 41 to 51 underachievement, and percent of 15-year-olds*). Struggle with grade expectations in Dec/Jan 2021 - but early school leaving). not before COVID-19 Struggle with grade expectations - both before COVID and in Dec/Jan 2021 *World Bank. 2020. Simulating the Potential Impacts of COVID-19 School Closures on Schooling and Learning Outcomes: A Set of Global Estimates (English). Washington, D.C.: World Bank Group Schooling challenges are fueled by a strong IT divide among children, adults, and between communes IT equipment access by point in income distribution The pandemic highlighted a preexisting urban-rural IT 100% 2% divide, with lower quality of access to technology and 7% 6% 17% 15% more limited digital skills in marginalized settlements, 90% 11% rural areas, and less educated / poorer households 80% 20% 20% 24% 70% 60% 46% Vulnerable children less likely to have access to 19% adequate equipment needed for distance learning – 50% but a clear and marked shift has occurred over time. 40% 40% of parents in poorer households state the need 72% 30% 13% 63% for IT equipment support for home schooling. 20% 42% 10% 24% Structural inequalities constrained the supply side: 0% integrating digital technologies into the education Poorest 40% Better off 60% Poorest 40% Better off 60% process raised several practical questions on the Apr-June, 2020 Dec-Jan, 2021 level of the school system’s preparedness to function Computer Tablet, no computer online, especially in disadvantaged communities Smart phone No equipment Pandemic has had an impact on social cohesion and trust in institutions. Access to information was widespread and not considered problematic But access to opportunities and services remained concentrated in larger urban centers. Marginalized populations felt that the institutions failed to provide viable solutions to their concerns other than safety against COVID-19 transmission Raising tensions between Roma and non-Roma . Social cohesion was reinforced in some cases Contact: Reena Badiani-Magnusson Rbadiani@Worldbank.org Valerie Morrica vstadlbauer@worldbank.org Household Pulse 15 - 20 minute phone survey to capture impacts of COVID-19 on household well-being and policy uptake Wave Wave Wave Wave 1 early to mid-May employment and income 2 early August education, health, behaviors 3 October/November employment and income, education 4 December/January education, health and behaviors • Employment and income • Education: learning at home, • Follow-up from wave 1 • Follow up from wave 2 effects – Ability to meet basic resources, difficulties • Return to school • Return to school needs • Health: access to health • Supplementary support from • Supplementary support from • Household structure, services schools schools education • Behavioral shifts — • Preventative behaviors to • Preventative behaviors to • Social protection and reopening shifts avoid uptick in transmission avoid uptick in transmission program uptake • Employment impacts, income (lighter) – perceptions 2 more waves are planned… Overview of survey Sampling approach, sample captured WAVE 1/2/3 Sample size 1502 households (Wave 1); 2241 households (Wave 2); 1518 (Wave 3) Sample frame A list of mobile and fixed phone numbers from the main telecom providers: Orange, Vodafone, Telekom and Digi with private subscribers and pre-paid users. Sampling Stratified and random sample. The strata criteria (based on INS data from TEMPO online, on 1 January 2020): economic development regions of Romania (8); counties (42); type of residence (4 - urban >100k, urban 10- 100k, urban <10k, rural) Respondent Knowledgeable of household finances and/or one of the main breadwinners selection Administered only to those > 18. Timing May 6th to May 19th 2020 (Wave 1; Panel 1 – Round 1); July 27th to August 17th 2020 (Wave 2; Panel 2 – Round 1); Oct 10th to Nov 12th (Wave 3; Panel 1 – Round 2) Partner Metro Media Transilvania Going forward, we have a better sense of gaps – but are concerned about persistence of the crisis since coping strategies are likely to be shakier. Despite some gaps, support has been reaching those in need. Gaps related to self-employed and non-standard workers have been gradually addressed. Support to households has thus far been primarily through labor market channels. Social transfers that may be more likely to benefit households in the bottom 40% have been less generous than labor market support – and uptake has not clearly risen. No clear problems on service delivery however. Since the package of support has become less generous over time – while being expanded to some groups of non-standard workers – we expect to continue to see sizeable income impacts but that coverage gaps in employment gaps will be closed – assuming that these programs are known and easy to As wave 2 of COVID continues and persists, we’re expecting to apply for. see rising shares of households reporting declines in income and falling into arrears.