The world remains to be grappling with the COVID-19 pandemic’s unprecedented affect on labor markets. In 2022, the worldwide unemployment price and the worldwide employment-to-population ratio remained 0.5 share factors above and 1.5 share factors beneath 2019 pre-crisis ranges, respectively, primarily based on ILO estimates. Nonetheless, whereas uneven, there was a sizeable restoration since 2020. That yr, the worldwide unemployment price had spiked by 1.2 share factors and the worldwide employment-to-population ratio had dropped by 2.5 share factors in comparison with 2019.
In response to the COVID-19 Social Safety and Jobs Coverage Stock, about 3,436 jobs-related insurance policies had been applied between January 2020 and January 2022. These insurance policies embody: 1) earnings assist insurance policies, akin to public works applications or money transfers to economically lively individuals; 2) lively labor market insurance policies, which embody entrepreneurship assist and coaching and placement help; 3) agency liquidity assist insurance policies, akin to tax reduction for corporations, credit score services, credit score ensures, company tax reductions and reduction from social safety contributions for corporations; and 4) labor laws defining formal work relationships.
Our new transient, Exploring Two Years of Labor Market Policy Responses to COVID-19: A Global Effort to Protect Workers and Jobs, highlights what now we have realized about these insurance policies, from agency liquidity assist insurance policies to particular person money transfers. Listed here are six takeaways from the transient:
1. Nearly all international locations have applied labor market insurance policies to guard employees and corporations from the results of the pandemic
These insurance policies focused people and households dealing with earnings and job losses. Most of the insurance policies targeted on supporting formal corporations, which is extra simply justified when going through a extreme however momentary shock. Primarily based on the expenditure knowledge obtainable, common spending on insurance policies benefiting corporations was greater than 3.5 occasions increased than for insurance policies concentrating on people.
2. International locations spent much more assets on labor market insurance policies than on another sort of social safety coverage
Expenditure knowledge is simply obtainable for 1,556 applications (a few quarter of the entire) throughout 196 international locations. Whereas incomplete, these knowledge present that international locations allotted a median of $32.6 billion (3.6 % of GDP) to labor market measures, versus $12 billion (1.9 % of GDP) and $400 million (0.2 % of GDP) to social help and social insurance coverage insurance policies, respectively. Excessive-income international locations allotted on common the very best share of GDP in the direction of labor market insurance policies at round 6.1 % ($76.1 billion). Low- and middle-income international locations spent on common lower than 2.5 % of GDP. Most of this spending was allotted in the direction of agency liquidity assist.
3. Labor market applications benefited a modest share of employees, notably in much less developed international locations
One-hundred and thirty-nine international locations with beneficiary knowledge obtainable present that labor market applications reached practically one million beneficiaries per program. Nonetheless, this quantity represents a modest proportion of the working-age inhabitants. For top-income and upper-middle-income international locations, labor market applications lined on common 7.33 and seven.87 % of the working-age inhabitants, respectively, versus 3.57 and three.31 % for low-income and lower-middle earnings international locations, respectively.
4. Agency liquidity assist insurance policies have continued to be probably the most prevalent coverage applied by international locations
Worldwide, 95 % of nations have applied liquidity assist insurance policies to assist corporations survive and retain employees (see determine 1). The 4 major sectors focused had been eating places, tourism, transportation, and agriculture. The most well-liked forms of applications had been tax reliefs, credit score services, and mortgage fee services. Collectively, these three forms of assist represented 65 % of all agency liquidity assist insurance policies globally.
Determine 1: Agency liquidity assist was the most well-liked sort of labor market coverage
Supply: COVID-19 SPJ Coverage Stock. Personal elaboration.
Notice: Graph primarily based on 3,436 applications applied by 221 international locations, together with 88 HICs, 58 UMICs, 47 LMICs, and 28 LICs. This contains 907 earnings assist; 320 lively labor; 414 labor laws and 1,795 agency liquidity assist insurance policies.
5. Money transfers had been a well-liked coverage to assist casual and non-salaried employees
The pandemic highlighted the vulnerability of casual employees who usually lack social insurance coverage preparations or different security nets. Money transfers had been one of the vital widespread earnings assist insurance policies utilized by governments to assist these employees. Of the applications with knowledge on focused teams, 79 % had been directed at these within the casual sector and solely 29 % had been aimed toward formal employees. Nonetheless, many money transfers to employees had been launched as one-time applications. Round 39 % of those money transfers had been a one-off measure, whereas roughly 60 % had been applied as momentary measures that had been designed to final just for a particular interval or till the tip of the COVID-19 pandemic. In distinction, lower than 1 % of those money transfers concerned everlasting interventions that are anticipated to be in place even after the disaster ends.
6. Many low-income international locations responded by adjusting labor laws
Labor laws had been extra widespread in low-income international locations (17 %) and fewer so in different earnings teams (between 11-12 %). The proof highlights {that a} comparatively increased share of low-income international locations (which usually have giant proportions of each casual employees and corporations) targeted on labor laws or agency liquidity assist – each measures that usually solely profit formal employees or corporations. Decrease monetary assets could have made these international locations much less seemingly to supply earnings assist or lively labor market insurance policies to affected employees.
Determine 2. Distribution of applications by earnings group and coverage class
Notice: Graph primarily based on 3,436 applications applied by 221 international locations, together with 88 HICs, 58 UMICs, 47 LMICs, and 28 LICs. This contains 907 earnings assist insurance policies (44 in LICs, 153 in LMICs, 283 in UMICs, 427 in HICs); 320 lively labor insurance policies (27 in LICs, 49 in LICs, 95 in UMICs, 149 in HICs); 414 labor laws (42 in LICs, 71 in LMICs, 125 in UMICs, 176 in HICs) and 1,795 agency liquidity assist insurance policies (136 in LICs, 306 in LMICs, 520 in UMICs, 833 in HICs). The x-axis signifies the variety of applications and the labels inside the bars point out the share share inside the respective earnings group.
Whereas international locations worldwide have put in place an unprecedented variety of social safety and jobs insurance policies to mitigate the impacts of the pandemic, far more must be finished. This underscores the significance of reforms in lower-income economies to register extra corporations and employees to broaden the pool of potential beneficiaries lined by jobs insurance policies and applications. These reforms can assist defend extra employees. Ultimately, this might allow jobs insurance policies that extra successfully mitigate shocks at early phases, earlier than they take their toll on earnings, employment, and livelihoods.