Food security and the COVID-19 employment shock in Nigeria: Any ex-ante mitigating effects of past remittances?

Abstract

This paper examines the role of past remittances in mitigating the adverse effects of COVID-19 employment shocks on food security in Nigeria. We formally define the mitigating effects parameter as the difference in the shock impact between households that received remittances and those that did not. Leveraging pre- and post-COVID-19 surveys, we employ a triple-difference strategy to estimate the mitigating effects parameter. Our results suggest that past remittances can alleviate the negative consequences of COVID-19 employment shocks, particularly in the short term. Indeed, the mitigation effect is limited to the early stages of the pandemic, as the negative effects of the shock persist over time. Additionally, we find that the impact of remittances on mitigating the shock varies based on the origin of remittances, recipients’ area of residence, and poverty status. Furthermore, our study highlights the importance of the capital channel in explaining the mitigating role of past remittances. Our findings demonstrate that formal financial inclusion, capital ownership such as livestock, and rental earnings amplify the impact of remittances in mitigating the negative consequences of COVID-19 employment shocks on food security.