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Cross-Cutting Themes in Employment Experiences during the Crisis

Author

Listed:
  • Athanasios Vamvakidis
  • Francis Vitek
  • Mwanza Nkusu
  • Reginald Darius
  • Alun H. Thomas
  • Edouard Vidon

Abstract

The human cost of the recent global crisis is reflected in its impact on the labor market. Explaining why economies with similar downturns had very different employment trends can help design policies to reduce such costs and improve labor markets. This paper analyzes the recent employment experiences of six economies: Germany, Korea, Mexico, New Zealand, Spain, and Sweden. These economies represent a wide range of labor market institutions, policy responses, and outcomes to the crisis. The divergence of labor market outcomes and of the effectiveness of policies during the crisis can be explained by the interaction between the nature of the shocks and differences in the structure and institutions of each country’s economy. The worst job losses compared to the drop in output followed permanent shocks, particularly in dual labor markets and in the presence of wage rigidities. Policies to avoid job cuts were much more effective when they were well-targeted and responded to temporary shocks. In contrast, policies to facilitate labor movements were more appropriate following permanent shocks.

Suggested Citation

  • Athanasios Vamvakidis & Francis Vitek & Mwanza Nkusu & Reginald Darius & Alun H. Thomas & Edouard Vidon, 2010. "Cross-Cutting Themes in Employment Experiences during the Crisis," IMF Staff Position Notes 2010/18, International Monetary Fund.
  • Handle: RePEc:imf:imfspn:2010/18
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    Citations

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    Cited by:

    1. Elva Bova & Christina Kolerus & Sampawende Tapsoba, 2015. "A fiscal job? An analysis of fiscal policy and the labor market," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-17, December.
    2. Nicola Acocella & Laura Bisio & Giovanni Di Bartolomeo & Alessandra Pelloni, "undated". "Labor market imperfections, real wage rigidities and financial shocks," Working Papers 80/11, Sapienza University of Rome, Metodi e modelli per l'economia, il territorio e la finanza MEMOTEF.
    3. Elva Bova & João Tovar Jalles & Christina Kolerus, 2016. "Shifting the Beveridge Curve; What Affects Labor Market Matching?," IMF Working Papers 16/93, International Monetary Fund.
    4. Jose Ignacio García Pérez & Victoria Osuna, 2011. "The effects of introducing a single open-ended contract in the Spanish labour market," Working Papers 11.07, Universidad Pablo de Olavide, Department of Economics.
    5. repec:eee:rujoec:v:3:y:2017:i:4:p:411-424 is not listed on IDEAS
    6. Vakulenko, E. & Gurvich, E., 2016. "Real Wage Flexibility in Russia: Comparative Analysis," Journal of the New Economic Association, New Economic Association, vol. 31(3), pages 67-92.
    7. World Bank, 2011. "Employment Protection Legislation and Labor Market Outcomes : Theory, Evidence and Lessons for Croatia," World Bank Other Operational Studies 12902, The World Bank.

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