The short-term impact of the 2020 pandemic lockdown on employment in Greece

This paper analyzes the short-term employment impact of the COVID-19 lockdown in Greece during the first few months following the pandemic onset. During the initial lockdown period, aggregate employment was lower by almost 9 percentage points than it would have been expected based on pre-pandemic employment trends. However, due to a government intervention that prohibited layoffs, this was not due to higher separation rates. The overall short-term employment impact was due to lower hiring rates. To uncover the mechanism behind this, we use a difference-in-differences framework, and show that tourism-related activities, which are exposed to seasonal variation, had significantly lower employment entry rates in the months following the pandemic onset compared to non-tourism activities. Our results highlight the relevance of the timing of unanticipated shocks in economies with strong seasonal patterns, and the relative effectiveness of policy interventions to partly absorb the consequences of such shocks

Technical and vocational education and training (TVET) for young people in low- and middle-income countries: a systematic review and meta-analysis

The world is facing a worsening youth employment crisis. In response, technical and vocational education and training (TVET) is back on the development agenda after years of neglect. This systematic review examined the evidence from studies evaluating the impacts of TVET interventions for young people in low- and middle-income countries (LMICs). The 26 included studies evaluated 20 different interventions, predominantly from Latin America. Meta-analyses of the effectiveness of TVET on five outcome measure categories were conducted. The overall mean effects on overall paid employment, formal employment, and monthly earnings were small, positive, and significant; however, significant heterogeneity was observed. Moderator analysis was performed in an attempt to explain between-study differences in effects. The overall paucity of research in this area, together with specific gaps and methodological limitations, affirm the need for strengthening the evidence base. Implications for policy, practice and research are discussed

Is Social Assistance Contributing to Higher Informality in Turkey?

Although still low for European standards, investments in Social Assistance (SA) transfers in Turkey have been increasing in recent years. The government is expanding access to subsidized health for individuals in the informal sector through a rapid expansion of the Green Card program. Generous non-contributory programs, such as the Green Card, may create perverse incentives for individuals to join or remain in the informal sector as they can access free services without paying taxes and/or contributions, thus potentially being able to get higher “net” labor earnings than in the formal sector. Despite the fact that the Green Card is a large and generous program offered to individuals in the informal sector, empirical analysis in this report does not find an actual impact of the program (or of its rapid expansion) on informality. The reason behind this finding is the existence of a very large differential in wages between formal and informal workers explained by differences worker’s productivity. Low-wage workers facing the possibility to move from the informal sector to the formal sector would have strong incentives to do so even if this would imply losing all SA benefits. As such, the expected monetary and job security gains of having a formal job dominate those of having an informal job even after accounting for SA transfers

Do employment subsidies work? Evidence from regionally targeted subsidies in Turkey

This paper studies the effects on registered employment and number of registered establishments of two employment subsidy schemes in Turkey. We implement a difference-in-differences methodology to construct appropriate counterfactuals for the covered provinces. Our findings suggest that both subsidy programs did lead to significant net increases in registered jobs in eligible provinces (5%–13% for the first program and 11%–15% for the second). However, the cost of the actual job creation was high because of substantial deadweight losses, particularly for the first program (47% and 78%). Because of better design features, the second subsidy program had lower, though still significant, deadweight losses (27%–46%). Although constrained by data availability, the evidence suggests that the dominant effect of subsidies was to increase social security registration of firms and workers rather than boosting total employment and economic activity. This supports the theory that in countries with weak enforcement institutions, high labor taxes on low-wage workers may lead to substantial incentives for firms and workers to operate informally