Working through the CrisisJobs and Policies in Developing CountriesDuring the Great RecessionArup BanerjiDavid NewhousePie...
Most developing countries had worseemployment outcomes due to the crisis7.05.24.8 4.73.44.54.73.93.62.41.20.91.81.41.92.2 ...
Summary: Overall Impact• Mostly reductions in earnings growth rather thanemployment growth.• But for youth, both increased...
Employment rates fell, especially for menin LICs and women in MICs63546555555648565654615163545477747968657367756763756978...
… but for those employed, more full-timework, especially for MICs and men3621335763432140636645224260653825355768452443636...
But the effects of the crisis was quitedifferent for different countries-2.5-2-1.5-1-0.500.511.5-20 -18 -16 -14 -12 -10 -8...
New PolicyMeasuresUndertakenSpecificTrans-MissionChannelsThe different amplitudes are becauseof different channels of tran...
Drop in earnings everywhere,employment in ECA/LACExport slowdowns had the biggestimpacts for developing countriesNature an...
SpecificTrans-MissionChannelsLabor regulations mattered in some countries (not all)in deciding whether the impact was thro...
New PolicyMeasuresUndertakenMacro policies worked better thanlabor/SP interventionsNature andsize ofoutcomeSize ofshock
4 Emerging Lessons1. Rapid and sizeable fiscal stimulus, and targeted sectoralstimulus for the most vulnerable sectors, ca...
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Multi-Donor Trust Fund on Labor Markets, Job Creation and Economic Growth: Working through the Crisis

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Jobs and policies in developing countries during the great recession

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Multi-Donor Trust Fund on Labor Markets, Job Creation and Economic Growth: Working through the Crisis

  1. 1. Working through the CrisisJobs and Policies in Developing CountriesDuring the Great RecessionArup BanerjiDavid NewhousePierella PaciDavid Robalino
  2. 2. Most developing countries had worseemployment outcomes due to the crisis7.05.24.8 4.73.44.54.73.93.62.41.20.91.81.41.92.2 2.12.34.23.74.93.32.54.02.93.44.0GDP Growth Employment Growth Wage GrowthIn the year to February 2011,GDP growth fell from 7% to 3.4%Wage growth from 4.2% to 2.5%Empl. growth from 2.4% to 1.4%
  3. 3. Summary: Overall Impact• Mostly reductions in earnings growth rather thanemployment growth.• But for youth, both increased unemployment andreduced wages.• Men seemingly more affected than women.• In most countries, no major differences between:– skilled vs. unskilled workers or– urban vs. rural areas.
  4. 4. Employment rates fell, especially for menin LICs and women in MICs635465555556485656546151635454777479686573677567637569786661493450444838303747474732484347Low-Income Countries (20)Lower Middle-Income Countries (35)Upper Middle Income Countries (27)High-Income Countries (37)Total (90)45 50 55 60 65 60 65 70 75 80 30 35 40 45 50Total Male Female2009 2010 2011Employment ratioSource:Gallup WorldPoll
  5. 5. … but for those employed, more full-timework, especially for MICs and men362133576343214063664522426065382535576845244363694824456172321729565537133162593814345954Low-Income Countries (13)Lower Middle-Income Countries (31)Upper Middle Income Countries (20)High-Income Countries (26)Total (90)20 30 40 50 60 70 20 40 60 80 10 20 30 40 50 60Total Male Female2009 2010 2011Share of employment in full-time wage workSource:Gallup WorldPoll
  6. 6. But the effects of the crisis was quitedifferent for different countries-2.5-2-1.5-1-0.500.511.5-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0ChangeinEmploymentLevels(2007-2009)Average change in GDP growth (2007-2009)IndonesiaTurkeyRussiaChinaSouth AfricaMexico
  7. 7. New PolicyMeasuresUndertakenSpecificTrans-MissionChannelsThe different amplitudes are becauseof different channels of transmissionNature andsize ofoutcomeSize ofeconomyOpennessMonetaryPolicyStructure ofProductionProductmarketinstitutionsFactormarketinstitutionsSize ofshock
  8. 8. Drop in earnings everywhere,employment in ECA/LACExport slowdowns had the biggestimpacts for developing countriesNature andsize ofoutcomeSize ofeconomyOpennessMonetaryPolicySize ofshock
  9. 9. SpecificTrans-MissionChannelsLabor regulations mattered in some countries (not all)in deciding whether the impact was throughemployment or earningsNature andsize ofoutcomeStructure ofProductionProductmarketinstitutionsFactormarketinstitutionsSize ofshock
  10. 10. New PolicyMeasuresUndertakenMacro policies worked better thanlabor/SP interventionsNature andsize ofoutcomeSize ofshock
  11. 11. 4 Emerging Lessons1. Rapid and sizeable fiscal stimulus, and targeted sectoralstimulus for the most vulnerable sectors, can work2. Use “good times” to improve the design and coverage ofsocial protection and labor systems – unemploymentinsurance, wage subsidies, etc.3. To protect the poor, need for scalable safety nets that thatcan expand and contract in response to the business cycle4. Need to invest in more real-time statistical informationsystems to quickly diagnose nature of shocks and instituteappropriate/ adequate evidence-based responses

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