Publication: Fewer Jobs or Smaller Paychecks? Labor Market Impacts of the Recent Crisis in Middle-Income Countries
Date
2010-04
ISSN
Published
2010-04
Author(s)
Abstract
This note presents early evidence on the
labor market impacts of the recent economic crisis in 41
middle-income countries. A broader geographic coverage is
prevented by the lack of high-frequency labor market data in
other middle-income countries and in the low-income
countries. Whereas the economic downturn has threatened
recent progress in enhancing employment opportunities, the
impact has fallen disproportionately on the quality of
employment rather than on the number of jobs. Slower growth
in earnings accounts for nearly three quarters of the total
adjustment for the average country. The bulk of the earnings
adjustment was driven by a reduction in working hours, as
well as a shift away from the better-paid industrial sector.
Evidence of the adjustment's nature and magnitude
suggests a policy package that combines: (1) income
maintenance programs that is, cash transfers to low-paid
poor workers; (2) interventions that facilitate
flexible-hours arrangements; and (3) innovative policies
that provide workers access to income maintenance mechanisms
to compensate for temporary reductions in standard working
hours for example, by granting partial compensation from the
unemployment benefit system or by providing paid training opportunities.
Citation
“Khanna, Gaurav; Newhouse, David; Paci, Pierella. 2010. Fewer Jobs or Smaller Paychecks? Labor Market Impacts of the Recent Crisis in Middle-Income Countries. Economic Premise; No. 11. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/f1dcc9b3-b08d-51b5-bf11-256409198b47 License: CC BY 3.0 IGO.”