Working through the Crisis: Jobs and Policies in Developing Countries during the Great Recession

Abstract

This document seeks to examine how the Great Recession affected labor markets in developing countries and how governments responded. The recession that began with the collapse of housing markets in the United States and Europe in late 2008 hit the labor markets particularly hard. Employment outcomes worsened sharply as economies shrank. Advanced economies and countries in Central and Eastern Europe suffered the most, with a sharp fall in the Gross Domestic Product (GDP). In Latin America and the Caribbean, output fell significantly. And although the economies of Asia, Africa, and the Middle East did not contract, their trend growth rates of GDP decelerated significantly. Globally, it is estimated that about 30 million jobs were lost over a period of two years. Where employment did not fall, accommodating the contraction of aggregate demand entailed a sharp drop in total earnings. This document is divided into seven chapters including the overview chapter, and discusses how the crisis affected output across countries, how labor markets adjusted, which workers were more likely to be affected, and which types of policies were implemented. In doing so, the chapters bring together a unique compilation of data and analysis from very different sources, including an inventory of policies implemented during the crisis among countries in Latin America, Eastern Europe, Asia, and Africa.