Description: Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries

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Fewer Jobs or Smaller Paychecks? Aggregate Crisis Impacts in Selected Middle-Income Countries

This paper reviews evidence from 44 middle-income countries on how the recent financial crisis affected jobs and workers' incomes. In addition to providing a rare assessment of the magnitude of the impact across several middle-income countries...

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Bibliographic Details
Main Authors:	Khanna, Gaurav, Newhouse, David, Paci, Pierella
Language:	English
Published:	2012
Subjects:	ACCOUNTING ACTIVE LABOR ACTIVE LABOR MARKET ACTIVE LABOR MARKET PROGRAM ACTIVE LABOR MARKET PROGRAMS ACTIVE LABOR PROGRAMS ACTIVE LABOUR ACTIVE LABOUR MARKET ACTIVE LABOUR MARKET POLICIES ADJUSTMENT PROCESS AGGREGATE EMPLOYMENT AVERAGE WAGE BUSINESS CYCLE COLLECTIVE BARGAINING DEBT DIRECT JOB CREATION DISPLACED WORKERS EARNING EARNINGS GROWTH EARNINGS INDICATORS EARNINGS LOSS EARNINGS REGRESSIONS ECONOMIC CRISES ECONOMIC DOWNTURNS ECONOMIC GROWTH ECONOMIC SHOCK ECONOMIC SHOCKS EMERGING MARKET EMERGING MARKET ECONOMIES EMPLOYERS EMPLOYMENT EMPLOYMENT EFFECTS EMPLOYMENT GENERATION EMPLOYMENT GROWTH EMPLOYMENT GROWTH RATE EMPLOYMENT LEVELS EMPLOYMENT OPPORTUNITIES EMPLOYMENT REDUCTION EMPLOYMENT TRENDS ENTRY BARRIERS FACTORING FINANCIAL CRISES FINANCIAL SERVICES FIRING FIRING COST FIRING COSTS FIRM SURVEY GROSS DOMESTIC PRODUCT HOUSEHOLD INCOME HOUSEHOLD SURVEY HOUSEHOLD SURVEYS INCOME SUPPORT INCOME SUPPORT PROGRAMS INFLATION INFORMAL SECTOR INFORMAL SECTOR WORKERS INTERNATIONAL LABOUR ORGANIZATION JOB CREATION JOB LOSS JOB LOSSES JOB MATCH JOB TRAINING JOBS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR FORCE PARTICIPATION LABOR MARKET LABOR MARKET ADJUSTMENT LABOR MARKET IMPACT LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET POLICIES LABOR MARKET REGULATIONS LABOR MARKETS LABOR ORGANIZATION LABOR REGULATION LABOR SHARE LABOR SUPPLY LABOUR MARKETS LAID-OFF WORKERS MARKET ECONOMIES MIGRATION NOMINAL WAGES PASSIVE LABOR PASSIVE LABOR MARKET PROGRAMS PENALTIES PRECISE ROLE PRICE INCREASES PRICE SUPPORTS PRIVATE SECTOR PRODUCTIVITY PUBLIC WORKS PUBLIC WORKS PROGRAM PUBLIC WORKS PROGRAMS REAL WAGE REAL WAGES REDUNDANCY RETAIL RETAIL TRADE SERVICE SECTOR SERVICE SECTORS SEVERANCE PAYMENTS SMALL MANUFACTURING SOCIAL CAPITAL SPREAD TEMPORARY WAGE SUBSIDIES TOTAL EMPLOYMENT TRAINING PROGRAM TRANSPORT UNDEREMPLOYMENT UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNEMPLOYMENT RATE UNEMPLOYMENT RATES UNEMPLOYMENT STATISTICS URBAN WORKERS VOLATILITY WAGE BILL WAGE GROWTH WAGE RATES WAGE SUBSIDIES WAGE SUBSIDY WAGE SUBSIDY PROGRAMS WORKER WORKERS WORKING POOR
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110908084150 http://hdl.handle.net/10986/3555

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Summary:	This paper reviews evidence from 44 middle-income countries on how the recent financial crisis affected jobs and workers' incomes. In addition to providing a rare assessment of the magnitude of the impact across several middle-income countries, the paper describes how labor markets adjusted and how the adjustments varied for different types of countries. The main finding is that the crisis affected the quality of employment more than the number of jobs. Overall, the slow-down in earning growth was considerably higher than that in employment, and the decline in gross domestic product was associated with a sharp decline in output per worker, particularly in the industrial sector. In several counties, hours per worker declined and hourly wages changed little. But both the magnitude and nature of the adjustments varied considerably across countries. For a given drop in gross domestic product, earnings declined more in countries with larger manufacturing sectors, smaller export sectors, and more stringent labor market regulations. In addition, overall employment became more sensitive to growth in gross domestic product. These findings have implications that go beyond the recent financial crisis as they highlight (i) the limitations of focusing policy responses on maintaining jobs and providing alterative employment or replacement income for the unemployed, and (ii) the critical role of fast-track data systems that are capable of monitoring ongoing labor market adjustment during economic downturns, in supporting the design of effective policy responses.