Publication: Addressing the Employment Effects of the Financial Crisis : The Role of Wage Subsidies and Reduced Work Schedules
Date
2009-09
ISSN
Published
2009-09
Author(s)
Abstract
This note briefly reviews the
experiences with wage subsidies and reduced work schedules
in promoting employment and avoiding the depreciation of
accumulated skills and knowledge due to a temporary
downturn. These policies have been adopted by many high
income countries as well as some middle income countries. It
is to early o comment on their impact; to date, they have
not been rigorously evaluated in the context of the
financial crisis. And any results will also be difficult to
generalize, since much depends on local conditions and the
structure of the labor market. Wage subsidies and reduced
work schedules show some promise as measures that can help
countries to increase the employment elasticity of growth
during the recovery and avoid the depreciation of skills
associated with unemployment or informal work. Wage
subsidies and reduced work schedules mainly benefit formal
sector workers, which represent less than 50 percent of the
labor force in most middle and low income countries.
Citation
“Robalino, David; Banerji, Arup. 2009. Addressing the Employment Effects of the Financial Crisis : The Role of Wage Subsidies and Reduced Work Schedules. World Bank Employment Policy Primer; No. 14. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/aa57536d-54fa-55de-8038-bd6e1a8fed07 License: CC BY 3.0 IGO.”