March 2021 March 2021 Findings from the Rapid Response Household Surveys 23rd March 2021 COVID-19 Rapid Response Household Surveys Survey representing Croatian households Timing • Round 1: June 2020 (completed) • Round 2: December 2020 (completed) • Round 3: March 2021 (completed) • Round 4: June 2021 (planned) Sample size • 1500 households • containing 4,288 individuals (3,614 adults and 674 children) Geographic • Representative of rural and urban areas coverage Survey content • Demographic indicators • Pre- and during- COVID-19 (employment, income, savings, opinions, children’s education and health) Similar surveys in • Bulgaria, Romania, Poland other countries • The survey design is also linked to the World Bank global rapid assessment monitoring framework 2 One year since the pandemic outbreak, more people approved the government’s reopening policies. But a majority of the population (81 percent) were still worried about the economy. Percent of respondents agreeing with reopening the economy 70% 60% 50% 40% 30% 20% 10% 0% rural urban men women not working working National Location Gender Employment Dec 2020 Mar 2021 Source: Croatia COVID-19 Rapid Response Survey (2021) Percent of respondents worrying about the economy 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All Bottom Middle Top 20 All Bottom Middle Top 20 40 40 40 40 Dec 2020 Mar 2021 Strongly agree Agree 3 By March 2021, work stoppages remained significant, although it was of a slightly lower magnitude than the first wave, likely due to less severe restrictions and the adaptation of firm and employment modalities to COVID-19 restrictions. Percent of workers continued to work by month Pre-COVID First wave of Ease of restriction Second wave of COVID- 100% COVID-19 19 95% Lockdown 90% 85% 80% 75% 70% 65% 60% 55% 50% Feb 2020 Mar 2020 Apr 2020 Jun 2020 Sep 2020 Oct 2020 Dec 2020 Jan 2021 Mar 2021 Source: Croatia COVID-19 Rapid Response Survey (2021) COVID-19 Stringency of restrictions index by month 100 80 60 40 20 0 Croatia Source: Oxford COVID-19 Government Response Tracker 4 By now, the pandemic has clearly shown to disproportionally affect lower-wage workers and deepened existing inequalities. One year after the pandemic outbreak, one in every four lower-wage workers still stopped working. Pre-COVID First wave of COVID- Ease of restriction Second wave of COVID-19 100% 19 95% Lockdown 90% 85% 80% 75% 70% 65% 27% lower-income 60% workers stopped 55% working 50% Feb 2020 Mar 2020 Apr 2020 Jun 2020 Sep 2020 Oct 2020 Dec 2020 Jan 2021 Mar 2021 Income Bottom 40 Income Middle 40 Income Top 20 Even for those continuing to work, lower-wage workers are also more likely to lose jobs, receive no or partial payments. 35% 30% 25% 20% 15% 10% 5% 0% Income Bottom Income Middle Income Top 20 Income Bottom Income Middle Income Top 20 40 40 40 40 Dec 2020 Mar 2021 5 Lost job No payment Partial payment Work disruption continued to lead to a decline in household income. March 2021 has not shown any sign of recovery. 22 % of households still reported income drops in March 100% 90% 80% 70% % households 60% 50% 40% 30% 21% decline 22% decline 20% 8% 9% 10% 8% 7% 0% 5% 6% Dec 2020 Mar 2021 Decrease >40% Decrease 20-40% Decrease <20% No change Increase Don't know Women-headed and working families suffered more 100% 90% 80% 70% 60% 50% 40% 30% 20% 8% 11% 10% 6% 10% 5% 9% 5% 9% 0% 5% 6% 7% 4% Men Women Not working Working Gender Employment Decrease >40% Decrease 20-40% Decrease <20% 6 No change Increase Don't know With income declining steadily, households depleted their savings. The situation was getting more difficult as the crisis prolonged more than anyone would have expected. Households reported no savings (% households) 100 90 80 70 60 50 40 87 63 67 67 72 30 60 61 58 55 20 34 10 0 Not working Urban Women Middle 40 Men Rural Working Bottom 40 Top 20 National Income Location Gender Employment No savings Insufficient savings Sufficient savings The lack of financial cushion to weather the pandemic is particularly severe for women, low-income households, and households with no working member. 7 A third of Croatian households still cut back overall spending because of reasons directly related to the crisis. Reported reduction in household spending in March 2021, by household types (% households) 40% 35% 30% 25% 28% 28% 23% 21% 20% 23% 18% 15% 10% 5% 10% 11% 8% 10% 10% 9% 0% Bottom 40 Middle 40 Top 20 Not working Working All Income Employment Substantially decrease Decrease The decline is more noticeable among top-income and working families, but for different reasons: • Top-income families are more likely to reduce high-end expenses such as travel and restaurants. • Working families scale back spending, likely due to a reduction in labor income. 8 Alarmingly, there has been little improvement in the extent to which families coped with the effects of the crisis. By now, as many Croatian families delayed bill payments as in the beginning of the second wave of COVID-19. Poor families continued to experience arrears of utility and phone bills, as well as credit payments In general, the situation in March has not improved much. 25% % households 20% 15% 10% 5% 0% Reduced food Delayed Got help Used savings Took a loan spending payment obligations Dec 2020 Mar 2021 21 percent of poor families delayed utility payment in March 2021. 25% 20% % households 15% 10% 5% 0% Utility bill Phone bills Credit payment Bottom 40 Middle 40 Top 20 9 In March 2021, more than 70 percent of poor people still reported difficulties meeting their expenses, compared to 82 percent in the beginning of the second wave and 81 percent during the first wave of COVID-19. Percent of respondents reported facing more difficulty meeting their expenses compared to pre-crisis level Employment Working Not working Women Gender Men Urban Location Rural Top 20 Income Middle 40 Bottom 40 All 0% 10% 20% 30% 40% 50% Dec 2020 Mar 2021 10 Looking ahead, Croatians are quite pessimistic about their financial situation in 2021. Nearly 70 percent of respondents believed 2021 would not be better than 2020. Women, people in lower income brackets, and people not working were more pessimistic. Percent of respondents reported perception of financial situation in 2021 compared to 2020 Employment Working 19% 46% Not working 32% 43% Women 25% 45% Gender Men 20% 45% Urban 22% 46% Location Rural 25% 44% Top 20 13% 51% Income Middle 40 24% 47% Bottom 40 28% 40% All 23% 45% 0% 20% 40% 60% 80% 100% Worse Same Better Not sure 11 The outlook for Croatian consumer confidence is not great. More than 80 percent of respondents reported they would not spend more on restaurant or durable goods in 2021 than in 2020. The share is slightly higher among workers signaling the prolonged effects of the crisis on labor income. Percent of respondents reported spending expectation in 2021 compared to 2020 Restaurant Durable goods 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Women Working Urban Not working Men Rural Working Women Urban Not working Men Rural National Location Gender Employment National Location Gender Employment Less Same More Not sure Less Same More Not sure 12 In fact, 37 percent of Croatians worried about either losing their jobs or not finding a job this year. It appears the prospect of finding new jobs among people currently not working was worse than the fear of losing jobs among current workers. Women and poor people were more pessimistic about the labor market and the economy. Percent of respondents worrying about losing their job or not finding a new job 60% 50% 40% 30% 41% 31% 32% 20% 29% 28% 22% 21% 24% 10% 8% 11% 7% 8% 10% 10% 0% 4% 4% national Not Working Bottom 40 Middle 40 Top 20 Men Women working All Employment Income Gender Strongly agree Agree Percent of respondents worrying about losing their job or not finding a new job 90% 80% 70% 60% 55% 62% 50% 61% 40% 57% 30% 20% 10% 20% 26% 25% 11% 0% Men Women Men Women Mar 2021 Dec 2020 Strongly agree Agree 13 Nearly 80 percent of Croatians were still concerned about health situation. About 60 percent would take COVID-19 vaccines when available. But less than half approved the implementation progress of the government’s COVID-19 vaccination program. Percent of respondents worrying about health 100% 80% 60% 63% 60% 40% 20% 26% 18% 0% Dec 2020 Mar 2020 Strongly agree Agree Percent of respondents indicated to take COVID-19 vaccines when it’s available 70% 7% 50% 30% 63% 53% 10% -10% Self Families and friends Would take vaccines Already took vaccines Percent of respondents indicated to take COVID-19 vaccines when it’s available 50% 40% 30% 20% 10% 0% Bottom 40 Middle 40 Top 20 Rural Urban not working working All Income Location Employment status 14 15