The Great Recession of 2008-2009: Causes ... - Index of - IZA

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a severe economic contraction over 2009, resulting in rapidly increasing unemployment (by 2.1 and 3.2 percentage points respectively). Overall, middle-income countries in Latin America and the Caribbean and CIS countries have experienced the largest increases in unemployment rates. Figure 9: Changes to unemployment rates in selected middle-income countries, August 2008 to August 2009. Source: National labour force surveys collected by the ILO Department of Statistics. Notes: Figures for Ukraine are based on the difference between June 2009 and September 2008. In the case of South Africa, one of the hardest-hit African countries, employment fell by almost 900,000 from 2008 to 2009. Despite this large contraction, the official unemployment rate only increased from 23.2 per cent in the third quarter of 2008 to 24.5 per cent in the third quarter of 2009. In fact, the main effect of the crisis-induced recession in South Africa has been rising discouragement rather than a surge in official unemployment, which has 33
increased more for vulnerable segments of the population, namely, uneducated, black South Africans (Verick 2010). At the same time, large developing countries appear to have emerged in better shape than expected. In India, a sample survey carried out by the Ministry of Labour and Employment shows that about half a million workers have lost their jobs during October-December 2008. However, more recent figures indicate that employment has since recovered: employment has increased by around 500,000 during the quarter July-September 2009 over the previous year, reflecting the overall resilience of the Indian economy. 37 Brazil fell into a recession in the first half of 2009 with unemployment rising to 8.6 per cent. However, by the third quarter of 2009, the economy was growing again with the unemployment rate returning quickly to the pre-crisis level. Moreover, formal employment creation in Brazil continued to grow: between January and October 2009, 1.2 million formal jobs had been added (ILO 2010b). As witnessed in previous downturns such as the East Asian crisis, informality tends to rise as laid-off workers typically do not have any form of social protection. Though it is too early to detect a clear trend in this dimension, the emerging pattern in the wake of the global financial crisis is more nuanced. For instance, employment in the informal sector in South Africa contracted over most of the crisis period (Verick 2010). Informality in Indonesia was on a downward trend before it started increasing in response to the impact of the crisis. The share of informal employment in Indonesia stood at 63.1 per cent in February 2007, which continued to fall, reaching 61.6 per cent in February 2008. 38 The share has since grown to 62.1 per cent, which reflects that the impact of the crisis has been relatively mild in comparison to other middle-income countries, particularly those located in Latin America, Central and Eastern Europe, and the CIS region. Though data is not yet available on household income, poverty has, however, most likely increased in badly-affected developing countries. 37 See the Report of the Effect of the Economic Slowdown on Employment in India (July-September 2009) and other editions produced by the Labour Bureau, Ministry of Labour & Employment, Government of India, http://labourbureau.nic.in/reports.htm. 38 See Indonesia’s Badan Pusat Statistik, www.bps.go.id. 34
Page 1 and 2: DISCUSSION PAPER SERIES IZA DP No.
Page 3 and 4: IZA Discussion Paper No. 4934 May 2
Page 5 and 6: collective sense of complacency in
Page 7 and 8: prevalence of crises throughout his
Page 9 and 10: further in this paper was that the
Page 11 and 12: investors in developed economies le
Page 13 and 14: concern for low and middle-income c
Page 15 and 16: Figure 2: Explaining the key factor
Page 17 and 18: dollar-denominated assets (typicall
Page 19 and 20: mortgage originations were sub-prim
Page 21 and 22: The trigger: bursting of the US hou
Page 23 and 24: Indeed, in contrast to some of the
Page 25 and 26: cent in the third quarter of 2009,
Page 27 and 28: Adjusting to a labour demand shock:
Page 29 and 30: This diversity in employment and wo
Page 31 and 32: Firstly, the crisis has in general
Page 33: workers on temporary contract and m
Page 37 and 38: the total - but does not analyze th
Page 39 and 40: What guidelines should policymakers
Page 41 and 42: of the impact on output and jobs fo
Page 43 and 44: The implications of the above findi
Page 45 and 46: search assistance measures (20 coun
Page 47 and 48: Table 8: Effectiveness of labour ma
Page 49 and 50: Table 9: Identifying recovery in OE
Page 51 and 52: Figure 12: Announced layoffs peaked
Page 53 and 54: individuals who are vulnerable of b
Page 55 and 56: have indeed risen in crisis-affecte
Page 57 and 58: surge in economic growth from 2002.
Page 59 and 60: International Research Conference
Page 61 and 62: Lustig, N. (2000). ‘Crises and th

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