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SMEs and Workers During Crises: Evidence from the Covid-19 Pandemic in Uganda
We use a five-year panel of Ugandan SMEs, supplemented with phone-survey data from August 2020, to analyze how the onset of the Covid-19 pandemic affected profits and employment. Most firms had employees, enabling us to investigate whether―and how―the crisis reshaped SMEs’ job-creation capacity, with particular focus on gender differences. Profits fell substantially for all firms, yet male entrepreneurs paradoxically expanded their workforce―suggesting that hiring under crisis may arise partly from social obligations. Meanwhile, female entrepreneurs bore heavier caregiving loads and relied more on extended family support, potentially hampering future growth through added caregiving and reciprocal obligations.
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