Impacts and Strategies Behind COVID-19-Induced Economic Crisis: Evidence from Informal Economy

The COVID-19 pandemic has put pressure on the informal sector, especially in developing countries. Regarding the case study found in Yogyakarta Special Region (Indonesia), this research focuses on workers in the informal sector with the following objectives: (1) to assess the impacts of COVID-19 pandemic on informal workers’ conditions, (2) to identify their strategies for surviving the crisis, and (3) to analyze the existing social safety net to support their livelihood. This study surveyed 218 respondents who worked in the informal, non-agricultural sector. The data were analyzed using descriptive statistical techniques. The results confirmed that most respondents underwent a decrease in working hours and incomes. In general, they have particular coping mechanisms to survive. The results also found that most respondents had high hopes for social assistance to stabilize their livelihood. Several government programs had been issued, either by improving policies before the pandemic or by creating new ones. However, there were many barriers and challenges to implementing them so that some recommendations had been suggested in this study to help the informal workers to become more resilient.