Publication: How will Labor Markets Adjust to the Crisis? A Dynamic View
Date
2009-03
ISSN
Published
2009-03
Author(s)
Abstract
Tracking flows of workers among
different sectors of employment during economic downturns
can shed light on the mechanism of labor market adjustment
and inform the design of safety net programs. Though
patterns may differ across recessions, the author find that
the generally countercyclical rise in unemployment and
informality is driven primarily by a reduction in hiring in
the formal sector, rather than increased labor shedding.
Further, changes in the rate of separations from informality
are the largest determinant of changes in unemployment. Both
suggest that safety nets should focus less on formal job
loss per se and more generally on movements in family
incomes, perhaps revealed through self targeting mechanisms.
Citation
“Maloney, William. 2009. How will Labor Markets Adjust to the Crisis? A Dynamic View. Latin America and the Caribbean Region (LCR) Crisis Briefs. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/6d0ce78d-4025-5b4c-8d17-57c24e878609 License: CC BY 3.0 IGO.”