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Avoiding the Eye of the Storm: How to Deal Effectively with Job Crises

Author

Listed:
  • Johansson, Sara

    () (World Bank)

  • Paci, Pierella

    () (World Bank)

  • Revenga, Ana

    () (World Bank)

  • Rijkers, Bob

    () (World Bank)

Abstract

Although economic crises are difficult to predict, their recurrence is a salient feature of emerging market economies. Nevertheless, many developing countries continue to lack an effective policy infrastructure that can mitigate the impacts of economic downturns on employment opportunities without affecting long-term growth prospects. This was painfully highlighted by the hasty reactions implemented by many countries in response to the global downturn of 2008–9, and by the ad hoc and reactive nature of many of the policies implemented. The weak ability of governments to systematically foresee, monitor, and offset adverse labor market impacts of economic downturns is of particular concern in developing countries where poverty incidence is high and labor is typically the only asset for the majority of the population (Lustig 2000). The main objectives of this note1 are (i) to highlight the need for policies that limit earnings volatility and (ii) to guide policy makers through the challenges inherent in crafting effective and comprehensive policy packages.

Suggested Citation

  • Johansson, Sara & Paci, Pierella & Revenga, Ana & Rijkers, Bob, 2010. "Avoiding the Eye of the Storm: How to Deal Effectively with Job Crises," World Bank - Economic Premise, The World Bank, issue 40, pages 1-5, November.
  • Handle: RePEc:wbk:prmecp:ep40
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    Keywords

    financial crisis; jobs; developing countries; growth; employment; unemployment; labor; poverty; labor market; recovery;

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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