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The Jobs Crisis Report -- Key Findings:

Unemployment in Europe and Central Asia rose sharply during the global economic crisis:

  • Unemployment rates more than doubled between 2008 and 2009 in Estonia, Latvia, and Lithuania
  • More men were unemployed because the male-dominated construction and manufacturing sectors were the hardest hit
  • Youth unemployment reached record highs as first time jobs were hard to find
  • Long-term unemployment increased as re-entry into the labor market became exceedingly difficult

Workers who kept their jobs took home smaller paychecks:

  • Although a lot of people lost their jobs, a much larger group of people suffered an income shock because their paychecks shrank as they worked fewer hours or were paid less
  • Firms tried to control their labor costs by:

    • increasing the use of part-time workers and temporary workers (Latvia, Hungary, the Czech Republic)
    • reducing real wages (Latvia, Lithuania) and
    • accumulating wage arrears (Russia)

Families tried to increase incomes and reduce household expenditures:

  • Families tried to increase their labor supply by working more hours or by finding jobs for non-working family members, but the strategy was not always successful

Reductions in expenditures on food and healthcare were most significant:

  • Families generally reduced the quantity and quality of food purchased
  • 20 percent of poor families in Bulgaria reduced their number of doctor visits when there was an illness in the family
  • 25 percent of poor families in Montenegro reduced their use of preventive healthcare

Unemployment insurance programs responded well in most countries:

  • In Estonia, Poland, and Russia unemployment insurance benefits were among the first benefits available to families affected by the crisis
  • To respond to a weak labor market, Romania and Latvia increased the duration for which unemployment benefits were paid out

Social assistance programs played a crucial role in helping families whose incomes fell below the poverty line:

  • In Bulgaria, Montenegro and Serbia, poverty targeted social assistance programs responded to increased demand from families affected by the crisis
  • However, there were delays in some crisis responses because of bottlenecks in existing poverty targeted social assistance programs.

Crisis responses can be improved by:

  • Making automatic stabilizers, such as unemployment insurance and last-resort social assistance, more responsive and broad-based
  • Adjusting program parameters, such as the duration of unemployment benefits, to the conditions on the ground
  • Starting new programs, such as public works or youth apprenticeships, to fill coverage gaps that emerge.

Efficient and flexible crisis responses require:

  • Building up savings for hard times
  • Factoring in efficiency costs
  • Collecting reliable and timely monitoring indicators