Cross-Cutting Themes in Employment Experiences during the Crisis

By Athanasios Vamvakidis, Francis Vitek, Mwanza Nkusu, Reginald Darius, Alun H. Thomas, Edouard Vidon

November 11, 2010

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Athanasios Vamvakidis, Francis Vitek, Mwanza Nkusu, Reginald Darius, Alun H. Thomas, and Edouard Vidon. Cross-Cutting Themes in Employment Experiences during the Crisis, (USA: International Monetary Fund, 2010) accessed December 22, 2024

Summary

The human cost of the recent global crisis is reflected in its impact on the labor market. Explaining why economies with similar downturns had very different employment trends can help design policies to reduce such costs and improve labor markets. This paper analyzes the recent employment experiences of six economies: Germany, Korea, Mexico, New Zealand, Spain, and Sweden. These economies represent a wide range of labor market institutions, policy responses, and outcomes to the crisis. The divergence of labor market outcomes and of the effectiveness of policies during the crisis can be explained by the interaction between the nature of the shocks and differences in the structure and institutions of each country’s economy. The worst job losses compared to the drop in output followed permanent shocks, particularly in dual labor markets and in the presence of wage rigidities. Policies to avoid job cuts were much more effective when they were well-targeted and responded to temporary shocks. In contrast, policies to facilitate labor movements were more appropriate following permanent shocks.

Subject: Employment, Labor, Labor market policy, Labor markets, Unemployment

Keywords: Countercyclical labor market institution, Crisis, Cross-cutting theme, Economy, Employment, Employment experience, External shock, Global, Labor market, Labor market adjustment, Labor market outcome, Labor market policy, Labor market response, Labor market rigidity, Labor markets, Spain, SPN, Temporary employment, Themes in employment experience, Unemployment

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Staff Position Note No. 2010/018
Stock No:

SPNEA2010018
ISBN:

9781462357604
ISSN:

2617-6742

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