Resilience and Recovery in the Informal Economy: Social Networks, Social Protection, and Adaptive Strategies Among Post‐COVID Workers in Bangladesh

ABSTRACT The informal economy is vital in developing countries by providing income opportunities to marginalized populations. The COVID‐19 pandemic intensified existing vulnerabilities, causing severe income loss and heightened insecurity. The study aims to investigate the impact of COVID‐19 on informal workers’ income and livelihoods, explore their adaptation strategies, and assess the role of social networks and social protection in enhancing resilience. Using a pragmatist paradigm and an exploratory sequential mixed methods design, the study collected qualitative data through 12 in‐depth interviews and quantitative data from 500 survey respondents, selected via purposive and snowball sampling. Thematic analysis and regression models were employed to interpret the findings. Results show that over 50% of informal workers experienced income decline, with many adopting coping strategies such as taking on additional jobs, reducing expenses, and seeking informal credit. Only 10% accessed formal social protection. Strong social networks proved vital, offering financial and emotional support. Regression analysis confirmed that income loss significantly increased financial insecurity ( β = −0.45, p < 0.01), whereas social networks ( β = 0.40, p < 0.01) and social protection ( β = 0.35, p < 0.01) positively influenced resilience. The study also found that respondents with access to informal credit networks or community organizations fared significantly better than others. The study highlights the urgent need for inclusive social protection, vocational training, and community‐based support to enhance the informal sector's resilience. Findings offer actionable insights for policymakers and development actors working toward sustainable recovery.