76061 Trends Jobs Job Watch 20 • Number Marc 2012 October Nu be 5 Labor Markets in Developing Countries Resilient in the Face of Slowing Growth Employment outcomes continued to improve in the second lombia, and fell in the other six countries in the sample. The quarter of 2012 in a sample of 12 middle-income countries, de- decline in unemployment generally translated into increased spite weakening economic growth. Figure 1 shows median employment, except for Chile and Brazil, where employment growth rates for output, employment, and wages as well as the fell as workers exited the labor market. Meanwhile, wage growth median unemployment rate for 12 middle-income countries. remained stable in most countries, with the exception of Peru, Gross domestic product (GDP) growth continued to slow down, where wages increased considerably. due in large part to continued uncertainty over economic condi- In the four East Asian countries in the sample, labor markets tions in the European Union. Despite these headwinds, labor continued to perform reasonably well. China, in particular, saw market indicators in these countries continued to slowly im- prove. Median employment growth nudged upward to 2.3 per- cent, while median unemployment fell to 5.7 percent, resuming Figure 1. Median Growth Rates for Sample of Middle-Income its steady decline from the heights of the financial crisis. The Countries continued sluggishness in the global economy has not halted the slow but steady recovery of these countries’ labor markets from 8 7.6 7.1 7.0 6.9 the impacts of the financial crisis. 7 6.5 6.2 7.0 6.1 5.8 Labor markets in Eastern Europe and Central Asia have been 6 5.7 5.2 resilient, often in the face of sharp drops in growth. Compared to 4.9 4.7 5 4.5 4.7 percent 4.2 4.0 the second quarter of 2011, declines in growth were particularly 4 4.8 3.9 3.4 striking in the Kyrgyz Republic, Belarus, Moldova, Turkey, and, 3.7 4.0 2.9 3 2.4 3.3 3.4 3.6 to a lesser extent, in Lithuania. Even in a few of these countries, 2.5 2 however, unemployment declined sharply, such as in Moldova, 1.2 2.2 2.3 0.9 1.9 2.1 1 1.8 Turkey and Lithuania, or held steady, such as in Belarus and the 1.4 Kyrgyz Republic. The sharply slowing growth was also not re- 0 flected in employment growth, which fell only mildly in Belarus, Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 10 10 10 11 11 11 11 12 12 Moldova, Turkey and Romania, and increased slightly in Lithua- 20 20 20 20 20 20 20 20 20 nia and the Kyrgyz Republic. Wage growth, meanwhile, increased GDP growth unemployment rate in most of these countries, with particularly large increases in the employment growth wage growth Kyrgyz Republic, Belarus, Tajikistan and Ukraine, while falling Source: CEIC Data Company, National Statistical Offices, and the International only slightly in Turkey and Moldova. The Russian Federation also Monetary Fund. Note: The series are median values for a subsample of 12 countries, with complete experienced strong declines in unemployment, with rising wage series up to Q2 2012 (except GDP for Colombia and República Bolivariana de growth, despite only a small increase in GDP growth. Venezuela; employment growth for Romania; and wage growth for South Africa). The countries included in this figure are Belarus, Brazil, Chile, China, Colombia, Mexico, Labor markets also continued to improve in Latin America Romania, Russia, South Africa, Thailand, Turkey, and República Bolivariana de despite slowing growth. Unemployment rose only slightly in Co- Venezuela. 1 Table 1. Labor Market Indicators for Selected Developing Countries GDP growth Employment growth Unemployment rate Wage growth Region Countries Q2/2011 Q2/2012 Q2/2011 Q2/2012 Q2/2011 Q2/2012 Q2/2011 Q2/2012 EAP China 9.5 7.6 4.1 10.3 4.1 4.1 12.1 15.5 EAP Indonesia 6.5 6.4 3.6 1.4 6.8 6.3 n.a. n.a. EAP Philippines 3.1 5.9 0.8 3.0 7.4 7.2 3.2 1.0 EAP Thailand 2.7 4.2 1.5 1.6 0.6 0.9 1.0 14.5 ECA Armenia 1.9 4.7 n.a. n.a. 17.8 16.5 -2.0 3.8 ECA Azerbaijan 0.8 0.5 0.5 1.2 n.a. n.a. -0.7 7.4 ECA Belarus 12.0 3.0 0.0 -2.0 0.7 0.7 8.6 15.7 ECA Kazakhstan 6.8 5.6 1.1 3.9 5.5 5.4 2.1 12.4 ECA Kyrgyz Republic 3.9 -6.6 0.4 2.7 2.6 2.6 5.4 21.7 ECA Lithuania 6.5 2.2 0.9 1.9 17.2 14.5 2.4 2.8 ECA Moldova 8.4 1.0 0.8 -0.6 9.4 7.2 7.9 4.2 ECA Romania 0.3 1.7 1.5 -0.5 5.1 4.6 -4.6 2.6 ECA Russian Federation 3.4 4.0 1.0 1.4 6.6 5.5 2.8 11.2 ECA Tajikistan 6.5 7.2 na na 2.5 2.6 8.7 15.6 ECA Turkey 9.1 3.2 6.3 3.0 9.5 8.6 8.1 6.4 ECA Ukraine 3.9 3.0 0.1 -0.3 8.7 8.4 5.7 16.5 LAC Brazil 3.3 0.5 2.4 2.1 6.3 5.9 4.4 3.2 LAC Chile 6.3 5.5 6.7 2.0 7.1 6.6 2.3 3.0 LAC Colombia 5.0 4.7 3.3 5.3 11.0 11.1 0.4 0.7 LAC Ecuador 8.8 4.8 -0.1 3.7 6.1 5.1 5.6 5.2 LAC Mexico 3.2 4.1 0.6 4.5 5.2 4.8 -0.6 1.7 LAC Peru 6.9 6.1 1.0 1.0 9.1 8.6 5.8 12.1 LAC Venezuela RB 4.8 5.6 1.3 2.3 8.4 8.0 5.4 5.6 SSA South Africa 3.3 3.0 0.5 2.5 25.7 24.9 5.4 0.5 EAP Region average 5.5 6.0 2.5 4.1 4.7 4.6 5.5 10.3 ECA Region average 5.3 2.5 1.1 0.2 7.8 7.0 3.7 10.0 LAC Region average 5.5 4.5 2.2 3.0 7.6 7.2 3.3 4.5 Source: CEIC database, National Statistical Offices, and International Monetary Fund. Notes: Region averages refer to the countries in this table. For some variables the period of reference is Q1-2012 and Q1-2011, employment: Ecuador, the Kyrgyz Republic, Lithuania, Moldova, the Philippines, Romania, and Ukraine; unemployment rate: Armenia, Ecuador, Kazakhstan, Lithuania, Moldova, Ukraine, and República Bolivariana de Venezuela; wage growth: Lithuania and South Africa; GDP growth: Armenia, Colombia, Ecuador, Kazakhstan, Moldova, and Tajikistan. For South Africa, earnings come from a firm survey and only represent the formal sector; for China earnings are only representative of urban regions. For the LAC region, labor market indicators, except from Mexico, refer to urban areas only. 2 a dramatic increase in employment growth despite a moderat- ing 13 percentage points over the previous year, as wages contin- ing growth rate. On the other hand, GDP growth remained rea- ued to recover following the severe flooding in 2011. Finally, in sonably high in Indonesia and picked up speed in Thailand and South Africa, labor market conditions improved despite mid- the Philippines. These growth increases did not necessarily dling GDP growth. Employment growth increased a full two translate into improved labor market conditions, however, ex- percentage points, and the unemployment rate, while remain- cept in Thailand. Thai wages continued to rise steeply, increas- ing one of the highest in the world, fell 0.8 percentage points. JobTrends is a regular series monitoring labor markets in developing countries. It is a collaborative effort between the Human Development Network (HDN) and the Poverty Reduction and Economic Management (PREM) Network of the World Bank. This note was prepared by Javier Arias-Vazquez, Gladys Lopez-Acevedo, and David Newhouse. For more information on this series, contact David A. Robalino, Lead Economist in the Social Protection Unit of HDN, or Gladys Lopez-Acevedo, Senior Economist of the Poverty Reduction and Equity Group of the PREM Network. The team gratefully acknowledges financial support from the governments of Austria, Germany, the Republic of Korea, Norway, and Switzerland through the Multi-Donor Trust Fund on Labor Markets, Job Creation, and Economic Growth. 3