Buffering Recessions: Labor Market Asymmetries and the Role of Self-Employment

Prakash Loungani, Emiliano Evaristo Luttini and Hayley Marie Pallan

No 11089, Policy Research Working Paper Series from The World Bank

Abstract: The employment structure in emerging markets and developing economies (EMDEs) differs markedly from that in advanced economies, which has implications for adjustment to cyclical conditions. This paper examines the cyclicality of employment in advanced economies and EMDEs. Although EMDEs exhibit a more violent GDP cycle than advanced economies, advanced economies present a steeper and more violent employment cycle. In the short term, an employment composition that is more biased toward self-employment, which is less cyclical, explains about 70 percent of these differences, while in the medium-term it accounts for about 40 percent. These characteristics explain why, during recessions, employment in advanced economies is more sensitive to economic fluctuations than in EMDEs.

Date: 2025-03-24
References: Add references at CitEc
Citations:

Downloads: (external link)
https://documents.worldbank.org/curated/en/0992040 ... 0ad-1f70e35a3907.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:11089

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().