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The paper studies the effects of the coronavirus disease 2019 (COVID‐19) pandemic on African economies and household welfare using a top‐down sequential macro‐micro simulation approach. The pandemic is modeled as a supply shock that disrupts economic activities of African countries and then affects households’ consumption behavior, the level of their welfare, and businesses’ investment decisions. The macroeconomic dynamic general equilibrium model is calibrated to account for informality, a key feature of African economies. We find that COVID‐19 could diminish employment in the formal and informal sectors and contract consumption of non‐savers and, especially, savers. These contractions would lead to an economic recession in Africa and widen both fiscal and current account deficits. Extreme poverty is expected to increase further in Africa, in particular if the welfare of the poorest households grows at lower rates. We also use the macroeconomic model to analyze the effects of different fiscal policy responses to the COVID‐19 pandemic.

This paper examines the incidence, drivers, and persistence of skill and educational mismatches among employed youths from 10 African countries surveyed between 2012 and 2015. Results indicate that, unlike most findings from developed countries, underskilling and undereducation are more prevalent among the youth than overskilling and overeducation. The levels of education of the youth and their parents, the field of study, the quality of job and the firm size are found to be key predictors of job mismatches. Our results also show that the perspective of unemployment has a scarring effect for underskilled youths but a stepping-stone effect for overskilled and overeducated. Using a pseudo-panel approach, skill and educational mismatches of youths are found to be persistent over time and the likelihood of transitioning into education matching jobs is significantly increasing with the levels of education.

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