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Table of Contents
Front Cover
Contents
Foreword
About the Authors
Acknowledgments
Executive Summary
Abbreviations
1 Overview
Rationale for this report
Road map
Key insights
Three dimensions of the policy response
Implications for the COVID-19 crisis
Notes
References
Annex 1A: Background papers written for this report
2 The Dynamics of Labor Market Adjustment
Introduction
Labor market flows: Unemployment versus informality
Job destruction and job creation in times of crisis
A changing employment structure and the disappearance of good jobs
Conclusion
Notes
References
Annex 2A: Additional analysis of employment transitions
3 The Impact on Workers, Firms, and Places
Introduction
Workers: A bigger toll on the unskilled
Firms: The cost of limited market competition
Places: The role of local opportunities and informality
Conclusion
Notes
References
4 Toward an Integrated Policy Response
Introduction
Three key policy dimensions
Aggregate: Stronger macroeconomic stabilizers
Social protection and labor systems: Cushioning the impact on workers and preparing for change
Structural: Greater competition and place-based policies
Conclusion
Notes
References
Boxes
Box 4.1 Family allowances as de facto unemployment insurance
Box 4.2 Brazil's social protection response to the COVID-19 (coronavirus) pandemic
Box 4.3 Latin America and the Caribbean's social protection and labor responses to the COVID-19 (coronavirus) contraction of 2020
Box 4.4 Permanent, systemic shocks: Responses to job dislocation caused by structural changes
Box 4.5 How well have regional policies performed at strengthening economic opportunities?
Box 4.6 Evidence on the effects of place-based policies on mobility and labor market outcomes
Figures.
Figure 1.1 Persistent employment loss following crises: The myth of economic recovery
Figure 1.2 How adjustment works and the policies that can smooth it
Figure 1.3 Stabilizers and macroeconomic frameworks: Policy reforms
Figure 1.4 Addressing crises' impacts and preparing workers for change: Policy reforms
Figure 1.5 Tackling structural issues that worsen the impacts of crises on workers
Figure 2.1 Quarterly fluctuations in unemployment and GDP growth, 2005-17
Figure 2.2 Quarterly net flows into formal and informal employment, 2005-17
Figure 2.3 Part-time work as a margin of adjustment in Argentina, 2005-15
Figure 2.4 Quarterly job loss, formal and informal sectors, 2005-17
Figure 2.5 Quarterly net job finding rates, formal and informal sectors, 2005-17
Figure 2.6 Gross job flows in Brazil and Ecuador, formal sector
Figure 2.7 Gross job flows and differential rates in large and small firms in the formal sector
Figure 2.8 Net job creation rates in Brazil and Ecuador's formal sectors
Figure 2.9 Quarterly share of workers entering unemployment per wage decile, formal and informal sectors, 2005-17
Figure 2.10 Impulse response functions, by type of employment, during the 30 months after the beginning of the recession
Figure 2.11 Estimates of Okun's Law for countries in the LAC region, 1991-2018
Figure 2A.1 Quarterly net flows into part-time work, formal and informal sectors, 2005-17
Figure 3.1 Effect on wages of displacement caused by plant closings in Mexico
Figure 3.2 Unemployment rates by cohort, Argentina and Colombia
Figure 3.3 Employment and wage effects of higher local unemployment at labor market entry in Mexico
Figure 3.4 Dynamic effects of the global financial crisis on workers
Figure 3.5 Heterogeneity in effects of the global financial crisis across workers.
Figure 3.6 Dynamic effects of the global financial crisis on workers by skill
Figure 3.7 Dynamic effects of the global financial crisis on firms
Figure 3.8 Effects of the global financial crisis on Brazilian workers depending on sectoral concentration and state ownership
Figure 3.9 Effects of the global financial crisis on Brazilian workers depending on local labor market informality
Figure 4.1 How adjustment works and a triple entry of policies to smooth it
Figure 4.2 Wage and unemployment responses during crises in the 2000s versus crises in the 1990s, Brazil and Mexico
Figure 4.3 Sensitivity of unemployment and wages to output fluctuations
Figure 4.4 Stabilizers and macroeconomic frameworks: Policy reforms
Figure 4.5 Effective coverage of unemployment benefits, selected countries, latest available year
Figure 4.6 Economic cycle, unemployment, and spending on labor policies and programs
Figure 4.7 Level and composition of government spending on social assistance transfer programs, selected LAC countries
Figure 4.8 Insufficient support, with many left behind
Figure 4.9 Coverage of social registries and support received through social assistance programs during the COVID-19 (coronavirus) pandemic
Figure 4.10 Expansion of cash transfer programs in response to crises
Figure B4.2.1 Brazil's COVID-19 (coronavirus) social protection and labor response strategy for two major vulnerable groups
Figure 4.11 Positive effects of welfare transfers on local formal employment
Figure B4.3.1 Stylized social protection and labor policy responses to the 2020 COVID-19 pandemic
Figure 4.12 Employment and reemployment policies, by the nature of the shock causing displacement
Figure 4.13 Addressing crises' impacts and preparing for change: Policy reforms.
Figure 4.14 Employment protection legislation in OECD member countries and selected Latin American countries, 2014 or most recent data
Figure 4.15 Regulation of employment in the LAC countries, circa 2019
Figure 4.16 Flexibility of labor regulation and spending on human capital and labor programs in selected countries in LAC compared to other regions
Figure 4.17 Labor market regulation instruments and the duration of unemployment
Figure 4.18 Tackling structural issues that worsen the impacts of crises on workers
Map
Map 4.1 Unemployment insurance throughout the world
Tables
Table 1A.1 Background papers written for this report
Table 2.1 Cyclical components of GDP growth, the unemployment rate, and net flows out of the labor force
Table 2.2 Cyclicality of net flows across sectors and out of employment, 2005-17
Table 2.3 Correlation of job loss across sectors
Table 2A.1 Cyclicality of employment transitions, by gender and skill level
Table 3.1 Presence of negative effects on employment and wage scarring, by gender and education
Table 4.1 Landscape of formal unemployment income support in the LAC region.
Contents
Foreword
About the Authors
Acknowledgments
Executive Summary
Abbreviations
1 Overview
Rationale for this report
Road map
Key insights
Three dimensions of the policy response
Implications for the COVID-19 crisis
Notes
References
Annex 1A: Background papers written for this report
2 The Dynamics of Labor Market Adjustment
Introduction
Labor market flows: Unemployment versus informality
Job destruction and job creation in times of crisis
A changing employment structure and the disappearance of good jobs
Conclusion
Notes
References
Annex 2A: Additional analysis of employment transitions
3 The Impact on Workers, Firms, and Places
Introduction
Workers: A bigger toll on the unskilled
Firms: The cost of limited market competition
Places: The role of local opportunities and informality
Conclusion
Notes
References
4 Toward an Integrated Policy Response
Introduction
Three key policy dimensions
Aggregate: Stronger macroeconomic stabilizers
Social protection and labor systems: Cushioning the impact on workers and preparing for change
Structural: Greater competition and place-based policies
Conclusion
Notes
References
Boxes
Box 4.1 Family allowances as de facto unemployment insurance
Box 4.2 Brazil's social protection response to the COVID-19 (coronavirus) pandemic
Box 4.3 Latin America and the Caribbean's social protection and labor responses to the COVID-19 (coronavirus) contraction of 2020
Box 4.4 Permanent, systemic shocks: Responses to job dislocation caused by structural changes
Box 4.5 How well have regional policies performed at strengthening economic opportunities?
Box 4.6 Evidence on the effects of place-based policies on mobility and labor market outcomes
Figures.
Figure 1.1 Persistent employment loss following crises: The myth of economic recovery
Figure 1.2 How adjustment works and the policies that can smooth it
Figure 1.3 Stabilizers and macroeconomic frameworks: Policy reforms
Figure 1.4 Addressing crises' impacts and preparing workers for change: Policy reforms
Figure 1.5 Tackling structural issues that worsen the impacts of crises on workers
Figure 2.1 Quarterly fluctuations in unemployment and GDP growth, 2005-17
Figure 2.2 Quarterly net flows into formal and informal employment, 2005-17
Figure 2.3 Part-time work as a margin of adjustment in Argentina, 2005-15
Figure 2.4 Quarterly job loss, formal and informal sectors, 2005-17
Figure 2.5 Quarterly net job finding rates, formal and informal sectors, 2005-17
Figure 2.6 Gross job flows in Brazil and Ecuador, formal sector
Figure 2.7 Gross job flows and differential rates in large and small firms in the formal sector
Figure 2.8 Net job creation rates in Brazil and Ecuador's formal sectors
Figure 2.9 Quarterly share of workers entering unemployment per wage decile, formal and informal sectors, 2005-17
Figure 2.10 Impulse response functions, by type of employment, during the 30 months after the beginning of the recession
Figure 2.11 Estimates of Okun's Law for countries in the LAC region, 1991-2018
Figure 2A.1 Quarterly net flows into part-time work, formal and informal sectors, 2005-17
Figure 3.1 Effect on wages of displacement caused by plant closings in Mexico
Figure 3.2 Unemployment rates by cohort, Argentina and Colombia
Figure 3.3 Employment and wage effects of higher local unemployment at labor market entry in Mexico
Figure 3.4 Dynamic effects of the global financial crisis on workers
Figure 3.5 Heterogeneity in effects of the global financial crisis across workers.
Figure 3.6 Dynamic effects of the global financial crisis on workers by skill
Figure 3.7 Dynamic effects of the global financial crisis on firms
Figure 3.8 Effects of the global financial crisis on Brazilian workers depending on sectoral concentration and state ownership
Figure 3.9 Effects of the global financial crisis on Brazilian workers depending on local labor market informality
Figure 4.1 How adjustment works and a triple entry of policies to smooth it
Figure 4.2 Wage and unemployment responses during crises in the 2000s versus crises in the 1990s, Brazil and Mexico
Figure 4.3 Sensitivity of unemployment and wages to output fluctuations
Figure 4.4 Stabilizers and macroeconomic frameworks: Policy reforms
Figure 4.5 Effective coverage of unemployment benefits, selected countries, latest available year
Figure 4.6 Economic cycle, unemployment, and spending on labor policies and programs
Figure 4.7 Level and composition of government spending on social assistance transfer programs, selected LAC countries
Figure 4.8 Insufficient support, with many left behind
Figure 4.9 Coverage of social registries and support received through social assistance programs during the COVID-19 (coronavirus) pandemic
Figure 4.10 Expansion of cash transfer programs in response to crises
Figure B4.2.1 Brazil's COVID-19 (coronavirus) social protection and labor response strategy for two major vulnerable groups
Figure 4.11 Positive effects of welfare transfers on local formal employment
Figure B4.3.1 Stylized social protection and labor policy responses to the 2020 COVID-19 pandemic
Figure 4.12 Employment and reemployment policies, by the nature of the shock causing displacement
Figure 4.13 Addressing crises' impacts and preparing for change: Policy reforms.
Figure 4.14 Employment protection legislation in OECD member countries and selected Latin American countries, 2014 or most recent data
Figure 4.15 Regulation of employment in the LAC countries, circa 2019
Figure 4.16 Flexibility of labor regulation and spending on human capital and labor programs in selected countries in LAC compared to other regions
Figure 4.17 Labor market regulation instruments and the duration of unemployment
Figure 4.18 Tackling structural issues that worsen the impacts of crises on workers
Map
Map 4.1 Unemployment insurance throughout the world
Tables
Table 1A.1 Background papers written for this report
Table 2.1 Cyclical components of GDP growth, the unemployment rate, and net flows out of the labor force
Table 2.2 Cyclicality of net flows across sectors and out of employment, 2005-17
Table 2.3 Correlation of job loss across sectors
Table 2A.1 Cyclicality of employment transitions, by gender and skill level
Table 3.1 Presence of negative effects on employment and wage scarring, by gender and education
Table 4.1 Landscape of formal unemployment income support in the LAC region.