Seasonal Poverty and the COVID-19 Pandemic In South Asia

Poor populations in low-income countries are likely to suffer the worst of the economic fallout from the COVID-19 crisis. 75% of the world’s poor reside in rural agrarian areas where livelihoods fluctuate with the seasonal crop cycle. We investigate how seasonality mediates economic impacts of the crisis by assembling panel data from rural Nepali and Bangladeshi households before and after the pandemic onset. We observe levels of economic distress comparable to a typical lean season during the early months even though the pandemic arrived during a harvest period. We further document two channels of persistence for economic distress. First, deprivation during harvest periods displaces agricultural and labor investment and will depress future earnings capacity. Second, nutritional and mental health deficits induced by the crisis can hinder economic decision-making and child development over the long term. Our findings inform how to target resources to facilitate economic recovery in rural areas.