Each new jobs report in the U.S. reignites the debate about whether the government is succeeding in stemming job losses and
doing enough to help stimulate the creation of new jobs.
The U.S. has been far from alone in pursuing active labor market policies during the crisis. In a new note, David Robalino
and I take stock of what labor market interventions countries have put in place during the recent crisis and summarize what
we know about their effectiveness to date, as well as discuss the emerging issues countries are facing as they adapt these
policies to a recovery period.
The main findings are:
Almost every high-income country and most middle-income countries have done something additional to intervene in the labor
market during the crisis. Data are currently more limited for poorer countries but also show a number of poorer countries
intervening in their labor markets.
The most common policies have been training programs, job search assistance, SME support and public works. Wage subsidies and
work-sharing arrangements have been less common in developing countries. Public works and cash transfer programs have been
most common in the poorer countries for which data are available.
There is little evidence yet as to the short-term effectiveness of these policies, let alone their dynamic effects. There is
a general sense that the policies have helped in reducing the fall in employment, and in some countries large numbers of
people have participated in the programs (eg the government of Indonesia estimates its stimulus package has lead to the
creation of 750,000 jobs). Formal evaluations of some programs are underway, including a wage subsidy program in Mexico and a
vocational training program in Turkey.
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