Wednesday, March 09, 2011
[IWS] World Bank: THE JOBS CRISIS: HOUSEHOLD & GOVERNMENT RESPONSES TO THE GREAT RECESSION IN EASTERN EUROPE AND CENTRAL ASIA [8 March 2011]
IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
The Jobs Crisis. Household and Government Responses to the Great Recession in Eastern Europe and Central Asia [8 March 2011]
[full-text, 130 pages]
The effects of the 2009 global financial crisis were more acutely felt in the Eastern Europe and Central Asia region than in any other region in the world. In a short period of time, property values plummeted, the value of retirement accounts shrank, household savings evaporated, and general consumer and producer confidence disappeared. Deteriorating macroeconomic conditions led to deteriorating household welfare, as unemployment increased and as workers who kept their jobs took home smaller paychecks. Households were forced to cope, but sometimes those coping strategies put households at a higher long-term risk, e.g. by reducing spending on health care. More positively, most households kept their children in school. Governments reacted to the crisis through social policy reforms and initiatives. Unemployment benefits played a particularly important cushioning role but coverage of the unemployed tended to be limited. Poverty targeted social assistance programs often reacted only with a lag and suffered from low coverage in some countries. Strengthening automatic stabilizers, adjusting program parameters and starting new programs can help Governments improve crisis responses in the future.
Press Release 8 March 2011
Public Programs Helped Families Weather Global Financial Crisis in Eastern Europe and Central Asia
New World Bank study identifies actions to improve responses to future crises
WASHINGTON, March 8, 2011 – Governments’ responses helped many families in Eastern Europe and
Central Asia to navigate the global economic crisis through a variety of initiatives, including unemployment
benefits, public works programs, and in some cases, last resort social assistance programs, states a new
World Bank report released in Washington today. However, these initiatives only reached a minority of the
families affected by the crisis.
Based on specialized crisis response surveys and government monitoring data, the report, ‘The Jobs
Crisis: Household and Government Responses to the Great Recession in Eastern Europe and Central
Asia’, concludes that the crisis’ effects were, and continue to be, more acutely felt in Eastern European and
Central Asian countries than in any other region in the world.
Although triggered by tightened credit markets, the crisis brought massive labor market shocks to the
region. Registered unemployment in 27 Eastern European and Central Asian countries increased from 9.4
to 12.2 million between December 2008 and December 2009. In Russia, Turkey and Ukraine
unemployment increased by around 30 percent between 2008 and 2009. Youth unemployment also rose
sharply, with up to a third of young people unable to find work in some countries. Workers who kept their
jobs took home smaller paychecks as employers offered lower hourly wage rates or fewer work hours.
Worker benefits were also reduced or cut.
These effects were felt among poorer households which often did not have the required savings to cushion
the impact of the crisis. Consequently, family well-being was threatened as families bought less and
cheaper food. Families’ health care expenditures were also markedly reduced. Crisis-affected households
in Armenia, Bulgaria and Montenegro, for example, reduced preventive and other doctor visits and
prescription drug use significantly.
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