The Jobs Crisis

M. Ihsan Ajwad

Description

The financial crisis, which began in the United States and Western Europe swiftly expanded into an economic crisis throughout developing countries. The Eastern Europe and Central Asia region was hit harder than any other region in the world. Deteriorating macroeconomic conditions led to deteriorating household welfare, as unemployment increased. Those workers who kept their jobs took home smaller paychecks. Men became more highly represented among the unemployed, and youth struggled to secure their first job.
Confronted by an income shock, families tried two strategies. First, families took steps to increase incomes, by inserting non-working members of the family into the labor force, by increasing the number of hours of work, borrowing, and tapping formal and informal safety nets. Second, families took steps to reduce expenditures, but some of those measures (food expenditures, health care utilization) could have an impact on nutrition and health in the long run. More positively, most households kept their children in school.
Many countries took steps to protect human welfare and long-term human capital. Measures included gearing up automatic stabilizers such as unemployment insurance, scaling up active labor market programs, strengthening last-resort social assistance, or increasing minimum pensions. These measures, however, only covered a minority of those in need and some programs responded more slowly than necessary. In addition, evidence from a few countries shows steps to ensure access to health and education services, especially for the poorest in the population.
The report finds that governments in the region can improve their crisis responses by making automatic stabilizers more responsive and broad based; adjusting program parameters to the conditions on the ground; and starting new programs to fill coverage gaps that emerge. However, to enable an efficient and flexible crisis response, governments can benefit from fiscal discipline during good times and reliable and timely monitoring systems.

Sujets

• Automatic stabilizer
• Great Recession
• Coping strategies
• Financial crisis of 2007?2010
• Welfare
• Unemployment benefits

Informations

• Publié par: world-bank-publications
• Publié le: 29 mars 2011
• Nombre de lectures: 46
• EAN13: 9780821387436
• Langue: English
• Poids de l'ouvrage: 3 Mo

Extrait

DIRECTIONS IN DEVELOPMENT
Human Development
The Jobs Crisis
Household and Government Responses to
the Great Recession in Eastern Europe
and Central AsiaIBRD 38280
JULY 2010
RUSSIAN FEDERATION
Baltic ESTONIA
Sea
LATVIA
LITHUANIA
RUSSIAN FED.
BELARUS
POLAND
UKRAINE
CZECH REP.
SLOVAK REP.
KAZAKHSTAN
MOLDOVA
HUNGARY
ROMANIA
SLOVENIA
Aral Sea
CROATIA
SERBIA
BOSNIA AND HERZ.
Black Sea
BULGARIA
Caspian
UZBEKISTAN
GEORGIA
MONTENEGRO Sea
KYRGYZ REP.
KOSOVO
AZERBAIJAN
ALBANIA
ARMENIA
FYR
TURKMENISTAN
MACEDONIA
TURKEY
TAJIKISTAN
This map was produced by the Map Design Unit of The World Bank.
0150 300 Kilometers
The boundaries, colors, denominations and any other information shown on
this map do not imply, on the part of The World Bank Group, any judgment
Mediterranean Sea on the legal status of any territory, or any endorsement or acceptance of
0 150 300 Miles
such boundaries.The Jobs CrisisThe Jobs Crisis
Household and Government Responses
to the Great Recession in Eastern Europe
and Central Asia© 2011 The International Bank for Reconstruction and Development/The World Bank
1818 H Street NW
Washington DC 20433
Telephone: [phone]
Internet: www.worldbank.org
All rights reserved
1 2 3 4 14 13 12 11
This volume is a product of the staff of the International Bank for Reconstruction and
Development/The World Bank. The findings, interpretations, and conclusions expressed in this
volume do not necessarily reflect the views of the Executive Directors of The World Bank or the
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endorsement or acceptance of such boundaries.
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ISBN: 978-0-8213-8742-9
eISBN: 978-0-8213-8743-6
DOI: 10.1596/978-0-8213-8742-9
Library of Congress Cataloging-in-Publication Data
The jobs crisis : household and government responses to the great recession in Eastern Europe
and Central Asia.
p. cm. — (Directions in development)
Includes bibliographical references.
ISBN 978-0-8213-8742-9 (alk. paper) — ISBN 978-0-8213-8743-6
1. Manpower policy—Europe, Eastern. 2. Europe, Eastern—Social policy. 3. Recessions—Europe,
Eastern. I. World Bank.
HD5764.7.A6J63 2011
331.12'0420947—dc22
2011006400
Cover photo: Unemployment office in Kurgan, Russia. Photo by ITAR-TASS / Alexander
Alpatkin.
Cover design: Naylor Design.Contents
Foreword xi
Acknowledgments xiii
Abbreviations xv
Overview xvii
Chapter 1 Introduction 1
Eastern Europe and Central Asia Were
Particularly Hard Hit by the Global GDP
Contraction, the First Since World War II 2
Four Transmission Channels: How the Crisis
Affects Household Welfare 5
About This Report 7
Note 11
Chapter 2 Labor Market Impacts 13
Labor Markets Were the Main Transmission
Channel for the Crisis 14
Unemployment Increased Sharply 15
Workers Who Kept Their Jobs Took Home
Smaller Paychecks 20
vvi Contents
In Bulgaria, Labor Market Adjustments
Were More Severe on Roma and Turkish
Minorities 26
The Employment Decline Varied across
Countries Due Not Only to Labor Market
Regulations but also to a Confluence
of Factors 26
Foreign Labor Market Conditions Spawned
Domestic Consequences 29
Notes 31
Chapter 3 Household Coping Mechanisms 33
Crisis Impacts Prompt Steps to Increase
Disposable Income and Reduce Expenditures 34
Households That Experienced a Shock
Sought to Cope by Increasing Disposable
Income 37
Households That Experienced a Shock also
Coped by Reducing Expenditures during
the Crisis 41
Poor and Minority Households Coped by
Adopting Riskier Coping Strategies than
Rich Households 46
Notes 51
Chapter 4 Social Policy Responses to Protect Households 55
Four Tools Have Been Deployed to Protect People
from the Effects of the Crisis 56
Labor Market Measures Have Been Deployed
and Early Results Are Encouraging 57
Social Assistance Measures Have Been Leveraged
and the Response Is Mixed 64
Minimum Pensions Were Used as a Crisis Response
to Protect the Poor 70
Government Education Spending Was
Protected More than Government Health
Sector Spending in 2009, and Some
Governments Tried to Shield the Poor from
Service Disruptions 70
Notes 76Contents vii
Chapter 5 Improving Responses to Subsequent Crises 79
Automatic Stabilizers 82
Adjusters 84
Starters 87
Crisis Responses Require Fiscal Discipline,
Planning, and Data 90
More Work on Crisis Responses Is Needed 92
Notes 92
References 95
Boxes
1.1 Crisis Response Surveys 8
3.1 Methodology to Assess the Social Impacts of the
2009 Crisis 42
3.2 The Impacts of Past Crises on Education Outcomes
Were Mixed 44
3.3 Most Impacts of Past Crises on Health Outcomes
Were Negative 47
3.4 Serbia Roma Crisis Assessment 51
4.1 Eastern European and Central Asian Countries
Used the Crisis as an Impetus to Initiate or
Accelerate Structural Adjustments to Reduce High
Fiscal Deficits 73
Figures
O.1 GDP Contracted More Significantly in Eastern
Europe and Central Asia in 2009 Relative to Other
Regions and the Recovery in 2010 Was also More
Muted than in Other Regions xviii
O.2 Unemployment Increased in Most of Eastern Europe
and Central Asia between 2008 and 2009 xx
O.3 Far More Workers Took Home Smaller Paychecks
than Lost Their Jobs xxi
O.4 Households Tried to Increase Income or Reduce
Expenditures to Mitigate the Impacts of the Crisis xxiii
O.5 Crisis-affected Households Increased Vulnerability
to Future Shocks by Adopting Risky Coping
Strategies xxiv
O.6 Three Pillars to an Effective Crisis Response xxviiiviii Contents
1.1 GDP Contracted More Significantly in Eastern
Europe and Central Asia in 2009 Relative to
Other Regions 2
1.2 Twenty of 30 Eastern European and Central Asian
Economies Contracted in 2009 3
1.3 Years of Development in Eastern Europe and
Central Asia Were Undone by the 2009 Recession,
Which Was More Severe than Past Financial Crises
in the Region 4
1.4 Fiscal Positions Deteriorated Substantially in
Many Eastern European and Central Asian
Countries, 2008–10 6
1.5 Economic Crises Affect Households through Four
Main Transmission Channels 7
2.1 Firm Responses to Demand Shocks 15
2.2 In Four Eastern European and Central Asian Countries,
the 2009 Crisis Affected Most Households through the
Labor Market Channel 16
2.3 Unemployment Increased in Most Eastern European
and Central Asian Countries between 2008 and 2009 17
2.4 In a Majority of Eastern European and Central Asian
Countries, Males Made Up a Bigger Fraction of the
Registered Unemployed in 2009 Relative to 2008 18
2.5 Youth Unemployment Rates in Eastern Europe and
Central Asia Were Twice Those of Adult Unemployment
Rates in 2009 According to LFS Data 19
2.6 Long-Term Unemployment Increased Dramatically in
Some Countries between End–2008 and End–2009 20
2.7 Number of Registered Job Seekers per Vacancy
Increased between 2008 and 2009, Revealing a Tighter
Labor Market in Most Countries 21
2.8 Far More Workers Took Home Smaller Paychecks than
Lost Their Jobs 22
2.9 Education Shielded Some Workers from Job Losses, but
Not from Earnings Reductions 23
2.10 Part-Time and Temporary Employment Increased from
Q4 2008 to Q4 2009, Albeit from a Low Base 24
2.11 Real Wages Declined Sharply in Some Eastern European
and Central Asian Countries, and Increased in Others
from Q4 2008 to Q4 2009 25