Fewer Jobs or Smaller Paychecks? Labor Market Impacts of the Recent Crisis in Middle-Income Countries
AbstractThis note presents early evidence on the labor market impacts of the recent economic crisis in 41 middle-income countries.A broader geographic coverage is prevented by the lack of high-frequency labor market data in other middle-income countries and in the low-income countries. Whereas the economic downturn has threatened recent progress in enhancing employment opportunities, the impact has fallen disproportionately on the quality of employment rather than on the number of jobs. Slower growth in earnings accounts for nearly three quarters of the total adjustment for the average country. The bulk of the earnings adjustment was driven by a reduction in working hours, as well as a shift away from the better-paid industrial sector. Evidence of the adjustment’s nature and magnitude suggests a policy package that combines (1) income maintenance programs—that is, cash transfers to low-paid poor workers; (2) interventions that facilitate flexible-hours arrangements; and (3) innovative policies that provide workers access to income maintenance mechanisms to compensate for temporary reductions in standard working hours—for example, by granting partial compensation from the unemployment benefit system or by providing paid training opportunities.
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Bibliographic InfoArticle provided by The World Bank in its journal Economic Premise.
Volume (Year): (2010)
Issue (Month): 11 (April)
jobs; wages; labor market; financial crisis; middle-income countries; employment; growth; earnings; unemployment; cash transfers;
Other versions of this item:
- Gaurav Khanna & David Newhouse & Pierella Paci, 2010. "Fewer Jobs or Smaller Paychecks? Labor Market Impacts of the Recent Crisis in Middle-Income Countries," World Bank Other Operational Studies 10197, The World Bank.
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
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