Managing the Employment Impacts of the COVID-19 Crisis: Policy Options for Relief and Restructuring (English)

Eliana Carranza, Thomas Farole, Ugo Gentilini, Matteo Morgandi (), Truman Packard, Indhira Vanessa Santos and Michael Weber

No 32579393, Jobs Group Papers, Notes, and Guides from The World Bank

Abstract: This note discusses policy options for managing the employment impacts of the COVID-19 (coronavirus) crisis aimed at relief and restructuring. The note pays attention to the labor market and institutional context of most low and middle-income countries where informality is large and where existing institutions often lack mechanisms to effectively reach businesses and workers in the informal economy. The note covers complementary policies aimed, in the relief phase, at: 1) Helping businesses survive and retain workers; 2) providing protection for those who do lose their jobs and see their livelihoods significantly affected; and 3) facilitating alternative employment and employability support for those who are out of work (collectively known as active labor market programs, ALMP). The note further differentiates between these relief responses and the restructuring response when countries start to reopen for businesses and policies need to aim to support firms' and workers' transition to a "new normal", hopefully a "better normal" that supports a resilient recovery.

Keywords: Micro, Small and Medium Enterprise; Equitable Growth, Finance and Institutions; relative price of capital; small and medium size enterprise; elasticity of labor supply; active labor market program; Wage Subsidies; wage subsidy; global financial crisis; public health crisis; social security contribution; employment subsidy; public health measures; wage subsidy program; cash transfer program; unemployment insurance system; informal sector worker; demand for labor; formal banking sector; support sme; in policy design; credit guarantee scheme; number of banks; provision of loans; payment of cash; incentive for employer; labor supply incentive; Gender-Based Violence; social protection program; income of household; Supply Chain Finance; Rural Travel and Transport; capacity of individual; fixed interest rate; business to business; business to consumer; small business administration; corporate income tax; corporate tax rate; interest rate cap; loans to business; loans for sme; barriers to capital; government policy interventions; effect on employment; care for child; place of work; privileges and immunity; loss of livelihood; wage subsidy scheme; Social Security Records; private sector company; payment of wage; lump sum payment; supply of labor; public health concern; lines of credit; export credit guarantee; social assistance system; decline in revenue; flexible work arrangement; speed of recovery; termination of employment; absence of access; form of credit; working capital; informal firms; minimum wage; employment impact; labor demand; informal worker; advanced country; policy option; Job Creation; resilient recovery; Wage Bill; fiscal space; loan guarantee; support worker; running cost; previous crisis; Political Economy; value chain; multiplier effect; viable business; payroll cost; social distance; SME lending; rent payment; firm size; government contract; banking system; wage employment; worker's salary; subsidized rate; Cash flow; employment relationship; compensation scheme; human capital; reduced work; financial market; in work; alternative employment; government support; implementing policy; extreme poverty; rising unemployment; Exit Strategy; commercial enterprise; emergency measure; loan repayment; work leave; sole responsibility; capital asset; depreciation allowance; tax year; property purchase; prompt payment; income threshold; income support; family leave; temporary employment; external environment; productivity benefit; federal government; social contribution; tax payment; loan obligation; total tax; young child; job loss; government pay; utility payment; government property; sovereign guarantee; rental payment; guarantee program; formal finance; bank lending; enterprise finance; short-term credit; E-Commerce Law; informal employment; risk sharing; duty drawback; commercial purpose; tax obligation; accelerated depreciation; liquidity injection; sales volume; paper issue; original work; interest-free loan; civil law; private company; several months; emergency management; soft loan; subsistence wage; daily wage; electronic message; fiscal resource; job retention; tax debit; fiscal constraint; severance pay; Informal Economy; payroll contribution; deadweight loss; market wage; universal interventions; complementary policies; social cost; capital grant; institutional context; income shock; general taxation; credit initiative; health emergency; disbursing loan; job destruction; economic efficiency; alternative policy; tax registry; particular country; future productivity; substitution effect; copyright owner; significant loss; universal provision; administrative cost; allocative efficiency; large bank; investment capital; take time; temporary measure; basic infrastructure; negative spillover; enterprise sector; high unemployment; social contract; large corporation; essential services; increased access; government guarantee; capital injection; SME credit; public support; credit subsidy; advanced economy; unpaid leave (search for similar items in EconPapers)
Pages: 36
Date: 2020-07-29
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