Sher Verick

International Labour Organization | ILO · Economic and Labour Market Analysis Department

The Indian economy is currently passing through a critical phase of economic development as its structural transformation in employment has stalled, whilst both the youth unemployment rate and the number of youths “Not in Employment, Education, and Training (NEET)” have increased to an unprecedentedly high level. In the context in which the share o...

The challenge of youth employment is not new. Even in good economic times, young people experience unemployment rates that are 3–4 times higher than adults. More than three out of four of the world’s young workers have informal jobs, while young people are overrepresented in working poverty and less protected forms of work, such as temporary and gi...

Resumen En 2020 la pandemia causó una crisis del mercado de trabajo más profunda que la generada por la crisis financiera mundial de 2009. Las medidas de contención fueron la principal causa del daño a los mercados de trabajo, que afectó particularmente a las economías de ingreso mediano, así como a ciertos sectores, como las actividades de alojami...

Résumé Les auteurs montrent que les marchés du travail ont davantage souffert des effets de la pandémie de COVID‐19 en 2020 que de ceux de la crise financière en 2009. Les mesures de confinement ont joué un rôle déterminant. La crise a donc touché plus durement les économies à revenu intermédiaire, certains secteurs comme l'hébergement et la restau...

The COVID‐19 pandemic has resulted in a more severe labour market crisis in 2020 than witnessed during the 2009 global financial crisis. Reflecting the effects of lockdown measures, which has been the main cause of damage to labour markets, the deepest impacts have been found in middle‐income economies, while certain sectors, such as accommodation...

Coming on top of long-term employment challenges, the COVID-19 crisis has severely impacted economies around the world. Due to the nature of their labour markets, middle-income countries (MICs), including India, have experienced greater employment declines than advanced economies. Some sectors have been hit harder than others, while certain groups—...

Over recent decades, the Indian economy has grown rapidly, particularly since the opening up of the economy in the early 1990s. Despite robust economic growth, the performance of the Indian labour market has been mixed. Contrary to the widely held view that India has experienced ‘jobless growth’, the data reveal strong employment growth in urban ar...

The faster growth of rural non-farm employment (RNFE) in the last decade in India attracted considerable analytical alteration, some even anticipating it as an indication of an alternative path of structural change. This chapter analyzes the changes in RNFE in terms of gender, class, activity, and quality. The analysis presented in this chapter fin...

In recent years, there has been widespread debate on India’s perceived failure to industrialise to the same extent as East Asian and other countries. Against this backdrop, this paper reviews the different dimensions and trends in the manufacturing sector, particularly in terms of employment. The paper highlights that, although manufacturing in Ind...

The recent South Asian (other than that of Bangladesh) experience of a growing merchandise trade deficit and the challenge of job creation have forced attention back on the role of manufac turing. Bangladesh has been able to successfully capture a large share of the global exports of ready-made garments, driven by low labour costs. Sri Lanka has be...

The changing nature of women’s participation in the labor force has been a critical dimension of the development process since the Industrial Revolution. However, the relationship between participation and economic progress is far from straightforward. Though cross-sectional data do indicate that there is a U-shaped relationship between female labo...

The global financial crisis deeply impacted labour markets around the globe. In the case of the United States, some commentators have argued that the subsequent rise in unemployment exceeded previous estimates of the elasticity of the unemployment rate with respect to output growth, a statistical relationship known as Okun’s law. In contrast, other...

The global financial crisis deeply impacted labour markets around the globe, particularly in a number of OECD countries. However, in such cases as the United States, some commentators have argued that the subsequent rise in unemployment has exceeded previous estimates of the elasticity of the unemployment rate with respect to output growth, a stati...

This book has traversed a broad range of labour market issues in emerging economies, with an in-depth focus on the situation in Brazil, Indonesia, South Africa and Turkey. Based on the empirical analysis of labour market indicators and a review of policies and institutions, the analyses identify a number of common trends and specific challenges.

The discipline of economics has become increasingly concerned with the understanding of labour markets’ adjustment in response to economic and structural changes and, in particular, the role of labour market regulations (institutions and policies) in influencing that process. The global financial crisis has recently revealed the extent to which the...

Turkey was directly affected by the great recession of 2008–2009, but showed considerable resilience thanks to a decade of sound macroeconomic policies and reforms implemented after several economic shocks. The large contraction in GDP (by 4.7 per cent in 2009) was largely due to the collapse in foreign demand and was amplified by domestic confiden...

The segregation policies of the Apartheid era in South Africa resulted in low levels of education, suppressed entrepreneurialism and spatial inequalities among the African population. Though Apartheid was dismantled in 1994, economic and social outcomes in this country continue to be heavily influenced by its historical legacy. This is no more appa...

During the 1960s and 1970s, Brazil grew rapidly, thanks largely to strong commodity prices, but this was accompanied by rising inequality. The military junta, which ruled from 1965 to 1985, followed a policy of import substitution. Despite the large accumulation of foreign debt, which financed industrialization, this approach proved unsuccessful an...

From the 1970s to the 1990s, Indonesia made incredible economic and social progress. During this period, Indonesians moved from rural to urban areas to take up better-paid jobs and, as a result, poverty fell from 40 per cent in 1976 to 11 per cent two decades later (Dhanani and Islam 2001). This rapid development trajectory was brought to a halt by...

Rapid and sustained economic growth has become the hallmark of successfully developing countries in recent times. Some of these countries have been able to grow at 8 per cent per annum or more over a long period, resulting in a doubling of the economy every decade. Though such high growth rates have become a benchmark for all aspiring developing co...

The weakening of the global recovery in 2012 and 2013 has further aggravated the youth jobs crisis and the queues for available jobs have become longer and longer for some unfortunate young jobseekers. So long, in fact, that many youth are giving up on the job search. The prolonged jobs crisis also forces the current generation of youth to be less...

The global financial crisis deeply impacted the South African labour market resulting in the shedding of almost 1 million jobs over 2009 and 2010. Reflecting longer term structural problems, this employment loss translated into a much larger rise in the number of discouraged individuals rather than those defined as 'narrowly' unemployed. Drawing on...

Contrary to the expectations of much of the early development literature, the informal sector has not only persisted but actually grown in many developing countries, particularly in Africa where it dominates the economy both in terms of output and employment. This growth has occurred in conjunction with increasing globalization and opening up of ec...

The East Asian financial crisis of 1997-1998 hit Indonesia hard, resulting in a winding back of the substantial economic and social gains made during the previous two decades. However, that crisis did not result in a large fall in employment and a commensurate rise in unemployment; rather, the economic contraction of over 13 per cent was accompanie...

This volume has navigated a wide and diverse terrain. Hence, it would be useful at this juncture to offer a summary of the key findings. This will set the appropriate context to reflect on the likely evolution of a post-crisis future and why one ought to move away from a ‘business as usual’ mindset.

The historical perspective provided in chapter 1 on the decades leading up to the financial crisis shows that the global economy was by no means as stable as had been suggested by many observers. That said, the crisis was largely unexpected and due to its complex roots, it continued to puzzle policymakers, economists and other commentators as it un...

As stressed in this volume, labour markets tend to recover slowly after a major financial crisis and usually lag behind economic growth, with unemployment persisting at above pre-crisis levels. For this reason, it is crucial for policymakers to consider various labour market policy (LMP) measures that both mitigate the impact of the crisis on worke...

The global financial crisis of 2007 quickly spread from the housing and credit markets in the United States to the rest of the world, resulting in the worst global recession since the Second World War. As a consequence of the downturn, millions of workers have been laid off, while for those lucky enough to hold on to their jobs, many have experienc...

Starting in mid-2007, the global financial crisis quickly metamorphosed from the bursting of the housing bubble in the US to the worst recession the world has witnessed for over six decades. Through an in-depth review of the crisis in terms of the causes, consequences and policy responses, this paper identifies four key messages. Firstly, contrary...

This book showcases research undertaken by current and former ILO staff on the macroeconomic and labour market dimensions of the Great Recession of 2008-09. It offers a global overview, interpreting the causes, consequences and policy responses to the Great Recession from the perspective of both developing and developed countries. With so many book...

We estimate a model of homogeneous capital investment with two installation possibilities - replacement and expansion using observations at the establishment level. We find that regime switches identified by "ad hoc" measures of lumpy investment do not adequately distinguish expansionary from replacement activities. In fact, during periods of expan...

The global financial crisis of 2008-2009 has deeply impacted South Africa due to its financial and trade links with the rest of the world. As a consequence, Africa’s largest economy fell into recession late in 2008. Although almost 900,000 jobs have since been lost, the results presented in this paper show that the contraction did not initially tra...

This paper examines the potential role of labour market institutions and policies in development. Going beyond the controversial proposition that labour market regulations result in lower job creation and high informality, the paper advocates for a realistic and affordable policy agenda, based on synergies between employment and social policies tha...

The current financial and economic crisis has resulted in the worst global recession since World War II. The subsequent destruction of jobs and increased duration of joblessness will ensure that unemployment across the world will continue to rise and stay stubbornly high for some time to come, well after the economy has begun to recover. Beyond thi...

While the recent increase in foreign direct investment (FDI) to African countries is a welcome development, the impact of these resource inflows on economic development remains in doubt. This article argues that a key channel is its effects on domestic factor markets, especially domestic investment, and analyses the two-way linkages between FDI and...

This paper presents a structural model of homogeneous capital investment under uncertainty with two installation possibilities – replacement and expansion. A unique longitudinal data set used to estimate the model contains observations at the establishment level on both types of expenditures. Investment including expansion is found to be more sensi...

This paper contributes to the growing literature on poverty dynamics in Australian households. The results reveal that a range of life-changing events, household head, partner and demographic characteristics have an impact on both the likelihood of remaining poor and slipping into poverty. These findings have important implications for Australian p...

Despite the recent increase in foreign direct investment (FDI) to African countries, these resources have not had a meaningful impact on economic development because of limited effects on domestic factor markets, especially domestic investment and employment. In this context, this study analyses the two-way linkages between FDI and domestic investm...

Even during periods of prosperity, disadvantage can persist in segments of the pop-ulation in industrialised countries. However, it is often assumed that it is the same households who remain in this situation, though they are more than likely to be experiencing transitory poverty as a result of changes in such dimensions as em-ployment status, fami...

Many African countries run a current account deficit, with a number of economies maintaining,high deficits above ,5% for ,many ,years. This raises concerns ,about ,the sustainability of these deficits and the subsequent debts accumulated,to finance,them. In this paper, we investigate the sustainability of current account deficits in a sample of Afr...

In October 1999 the unemployment rate of people with severe disabilities in Germany was more than double that of the non-disabled population. To improve this situation, the People with Severe Disabilities Act was reformed to increase incentives for the severely disabled to enter the work force and for employers to hire such workers. In 2003 the Fed...

In this paper we investigate the dynamic adjustment of labour and capital in German and Dutch firms. The Dutch labour market is characterised by greater flexibility in wages and work arrangements in comparison to Germany. These institutional differences imply that employment dynamics in the two countries should differ, and in particular, labour adj...

The empirical identification of non-linearities in investment relies on how investment is assumed to be separated into various regimes. Using German establishment-level panel data, we estimate a two-regime model of replacement and expansion investment which allows us to observe regime separation, an aspect of the data that is typically absent from...

In this paper we use a reform in the applicability of the Protection Against Dismissal Act or Kündigungsschutzgesetz in Germany to identify employment effects of the legislation for small establishments. Using a panel of establishments for the period 1997-2001, we find some evidence that a tightening of the threshold resulted in a higher probabilit...