How Did the Great Recession Affect Different Types of Workers? Evidence from 17 Middle-Income Countries

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu This paper examines how different types of workers in 17 middle-income countries were affected by labor market retrenchment during the great recession. Impacts on different types of workers varied by country and were only weakly related to the severity of the shock. Among active workers, youth experienced by far the largest adverse impacts on employment, unemployment, and wage employment, particularly relative to older adults. The percentage employment reductions, for example, were greatest for youth in each sector of the economy, as firms reacted to the shock by substituting away from inexperienced workers. Employment rates, as a share of the population, also plummeted for men. Larger drops in male employment were primarily attributable to men's higher initial rate of employment, although men's concentration in the hard-hit industrial sector also played an important role. Within each sector, percentage employment declines were similar for men and women. Added worker effects among women were mild, even among less-educated workers. Differences in labor market outcomes across education groups and urban or rural residence tended to be smaller. These findings bolster the case for targeted support to displaced youth and wage employees. Programs targeted to female and unskilled workers should be undertaken with appropriate caution or empirical support from timely data, as they may not benefit the majority of affected workers. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: E24, E32, J21, O15

Unemployment Exits Before and During the Crisis

“…One strand of the literature analysing heterogeneity across socio-economic groups focuses on the ratios of unemployment, employment, and non-participation (Cho and Newhouse, 2013;Hoynes et al, 2012). Other studies, more in line with our study, analyse transitions between labour market states, mainly the probability to find a job (Bachmann et al, 2015;Bergin et al, 2015).…”

“…In this paper, we do not focus on the business cycle variation in aggregate durations, but on the heterogeneity across different socio-economic groups. The literature suggests that three key mechanisms may explain differences in the impact of the recession across groups (Cho and Newhouse, 2013): occupational segregation, employment decisions of firms, and labour supply decisions. The nature of the shock, labour market adjustments, and institutions may also play a role.…”

Gendered costs of austerity: The effects of welfare regime and government policies on employment across the OECD, 2000–13

“…For an overview of the main factors that predict employment outcomes during the financial crisis across groups, including the effects of employment sector, seeCho and Newhouse (2013). The study finds no negative gendered effect during the recession, but it does not account for gendered differences in welfare systems, larger sample sizes and other relevant variables.…”

“…Similar patterns of sectoral segregation appear across the whole of the EU, where 80 per cent of construction workers are men, while 78 per cent of health-care and social services workers, and over 60 per cent of teachers in primary and secondary education, are women (ibid.). Consequently, by 2009, female unemployment rates across many EU countries began to increase more than male rates (Cho and Newhouse, 2013).…”

“…Access to social benefits and levels of support for women, particularly in the aftermath of economic crises is, therefore, largely dependent on the welfare state context. 2 In the wake of severe economic crises, the institutional effects of different welfare states on gender outcomes are expected to be magnified (Dolls, Fuest and Peichl, 2010a;Cho and Newhouse, 2013;Karamessini and Rubery, 2014). This is due to the fact that social protection measures act as primary buffers between citizens and the effects of economic downturn.…”