The COVID-19 pandemic has caused massive disruptions to the global economy and forced policymakers to respond to the newly created challenges. Many policy institutions have therefore had to rethink their established approaches and their usual policy responses.

Employment is key to combating poverty. Thus, detractors of social assistance programs argue that they create disincentives to work. While there is substantial evidence showing limited effects of these programs on overall labor supply, the jury is still out with respect to their impact on formal...