Description:
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.