Publications on Economic crisis
Policy Note 2020/1 | March 2020
The Economic Implications of the PandemicThe spread of the new coronavirus (COVID-19) is a major shock for the US and global economies. Research Scholar Michalis Nikiforos explains that we cannot fully understand the economic implications of the pandemic without reference to two Minskyan processes at play in the US economy: the growing divergence of stock market prices from output prices, and the increasing fragility in corporate balance sheets.
The pandemic did not arrive in the context of an otherwise healthy US economy—the demand and supply dimensions of the shock have aggravated an inevitable adjustment process. Using a Minskyan framework, we can understand how the current economic weakness can be perpetuated through feedback effects between flows of demand and supply and their balance sheet impacts.Download:Associated Programs:Author(s):
One-Pager No. 62 | March 2020As the coronavirus (COVID-19) spreads across the United States, it has become clear that, in addition to the public health response (which has been far less than adequate), an economic response is needed. Yeva Nersisyan and Senior Scholar L. Randall Wray identify four steps that require immediate attention: (1) full coverage of medical costs associated with testing and treatment of COVID-19; (2) mandated paid sick leave and full coverage of associated costs; (3) debt relief for families; and (4) swift deployment of testing and treatment facilities to underserved communities.Download:Associated Program:Author(s):Yeva Nersisyan L. Randall Wray
Gender, Socioeconomic Status, and Time Use of Married and Cohabiting Parents during the Great Recession
Working Paper No. 888 | April 2017
Using data from the 2003–14 American Time Use Survey (ATUS), this paper examines the relationship between the state unemployment rate and the time that opposite-sex couples with children spend on childcare activities, and how this varies by the socioeconomic status (SES), race, and ethnicity of the mothers and fathers. The time that mothers and fathers spend providing primary and secondary child caregiving, solo time with children, and any time spent as a family are considered. To explore the impact of macroeconomic conditions on the amount of time parents spend with children, the time-use data are combined with the state unemployment rate data from the US Bureau of Labor Statistics. The analysis finds that the time parents spend on child-caregiving activities or with their children varies with the unemployment rate in low-SES households, African-American households, and Hispanic households. Given that job losses were disproportionately high for workers with no college degree, African-Americans, and Hispanics during the Great Recession, the results suggest that the burden of household adjustment during the crisis fell disproportionately on the households most affected by the recession.Download:Associated Program:Author(s):Ebru Kongar Mark Price
Public Policy Brief No. 143, 2017 | February 2017
Since inheriting the Brazilian presidency five months ago, the new Temer administration has successfully ratified a constitutional amendment imposing a radical, two-decades-long public spending freeze, purportedly aimed at sparking an increase in business confidence and investment. In this policy brief, Fernando Cardim de Carvalho explains why this fiscal strategy is based not only on a flawed conception of the drivers of private-sector confidence and investment but also on a mistaken view of the roots of the current Brazilian economic crisis. The hoped-for “expansionary fiscal consolidation” is not likely to be achieved.Download:Associated Program:Author(s):
Working Paper No. 812 | August 2014
What Difference Did the Great Recession Make?
Feminist and institutionalist literature has challenged the “Mancession” narrative of the 2007–09 recession and produced nuanced and gender-aware analyses of the labor market and well-being outcomes of the recession. Using American Time Use Survey (ATUS) data for 2003–12, this paper examines the recession’s impact on gendered patterns of time use over the course of the 2003–12 business cycle. We find that the gender disparity in paid and unpaid work hours followed a U-shaped pattern, narrowing during the recession and widening slightly during the jobless recovery. The change in unpaid work disparity was smaller than that in paid work, and was short-lived. Consequently, mothers’ total workload increased under the hardships of the Great Recession and declined only slightly during the recovery.Download:Associated Program:Author(s):Ebru Kongar Günseli Berik
Working Paper No. 765 | May 2013Following the financial crisis of 2008, transition countries—the economies of Central and Eastern Europe and the former Soviet Union—experienced an increase in female labor force participation rates and a decrease in male labor force participation rates, in part because male-dominated sectors were hit the hardest. These developments have prompted many to argue that women have been spared the full-blown effects of the crisis. In this paper, we critically evaluate this claim by investigating the extent to which the increase in the female labor force participation rate may have reflected a distress labor supply response to the crisis. We use the data on the 28 countries of the transition region assessed in the 2010 Life in Transition Survey. We find the presence of the female added worker effect, driven by married 45- to 54-year-old women with no children in the household. This effect is the strongest among the region’s middle-income countries. Among men, a negative relationship between labor force participation and household-specific income shocks is indicated.
Unlike the differences in the response to household-specific income shocks, the labor supply response to a weaker macroeconomic environment is negative for both men and women—hinting at the presence of the “discouraged worker” effect, which cuts across gender lines. We conclude that the decrease in men’s labor force participation observed during this crisis is likely a combined result of the initial sectoral contraction and the subsequent impact of the discouraged worker effect. For women, on the other hand, the added worker effect appears to outweigh the discouraged worker effect, contributing to an increase in their labor force participation rate. Our findings highlight the presence of heterogeneity in the way in which household-specific shocks, as opposed to economy-wide conditions, affect both female and male labor force participation rates.
Working Paper No. 696 | November 2011
The US Business Cycle of 2003–10
The US economic crisis and recession of 2007–09 accelerated the convergence of women’s and men’s employment rates as men experienced disproportionate job losses and women’s entry into the labor force gathered pace. Using the American Time Use Survey (ATUS) data for 2003–10, this study examines whether the narrowing gap in paid work over this period was mirrored in unpaid work, personal care, and leisure time. We find that the gender gap in unpaid work followed a U-pattern, narrowing during the recession but widening afterward. Through segregation analysis, we trace this U-pattern to the slow erosion of gender segregation in housework and, through a standard decomposition analysis of time use by employment status, show that this pattern was mainly driven by movement toward gender-equitable unpaid hours of women and men with the same employment status. In addition, gender inequality in leisure time increased over the business cycle.Download:Associated Program:Author(s):Günseli Berik Ebru Kongar
Working Paper No. 686 | September 2011
This paper provides estimates of the impact of the recent economic crisis on paid and unpaid work time in Turkey. The data used in this study come from the first and only time-use survey available at the national level. Infrequency of collection of time-use data in Turkey does not allow us to make a direct comparison of pre- versus postcrisis time-use patterns. We introduce a tractable way for estimating these possible effects by measuring the impact of an increase in unemployment risk on time-use patterns of women and men living in couple households. The method developed here can be applied to other developing-country cases where there is a lack of longitudinal data availability. Our findings support the argument that economic crises reinforce the preexisting gender inequalities in work time.Download:Associated Program:Author(s):Emel Memiş S. A. Kaya Bahçe
Working Paper No. 562 | May 2009
A Gender Perspective
Widespread economic recessions and protracted financial crises have been documented as setting back gender equality and other development goals in the past. In the midst of the current global crisis—often referred to as “the Great Recession”—there is grave concern that progress made in poverty reduction and women’s equality will be reversed. Indeed, for many developing countries it is particularly worrisome that, through no fault of their own, the global economic downturn has exacerbated effects from other crises manifest in food insecurity, poverty, and increasing inequality. This paper explores both well-known and less discussed paths of transmission through which crises affect women’s world of work and overall wellbeing. As demand for textile and agricultural exports decline, along with tourism, job losses are expected to rise in these female-intensive industries. In addition, the gendered nature of the world of work suggests that women will see an increase in their share among informal and vulnerable workers worldwide, and will also supply more of their labor under unpaid conditions. The latter is particularly important in the context of developing countries, where many production activities take place outside the strict boundaries of the market. The paper also makes this point: examined through the prism of gender equality, the ability of the state to implement countercyclical policies matters greatly. If policy responses at the national and international levels end up aggravating inequities, gender equality processes face many more barriers, especially among the poor.Download:Associated Program:Author(s):