The Jobs Crisis in Easter Europe and Central Asia (2007-2011) and The Assignment

The Jobs Crisis in Easter Europe and Central Asia (2007-2011) and The Informal Labour Market in the Czech Republic(2012) - Assignment Example the recession, can be felt through four transmission channels, namely the financial markets, product markets, labour markets and government services. This report of World Bank particularly focuses on labour markets and the government services. The findings of the report clearly point out that the factor which can be attributed for the major decline of household welfare is the loss of jobs in labour markets. This period had witnessed major job cuts in most of the industries (more in construction and manufacturing), which had directly impacted the households. The youth unemployment had also reached record high in this period. The biggest disadvantage was, perhaps, long-term unemployment in the labor market. The workers, who could save their jobs, had also experienced a contraction in their real wages as most companies started to cut back on the paychecks. The households began to cope by reducing their expenditure and increasing their labour supply to earn more. The reduction in expenditure was felt most in sectors of healthcare and food. The governments in most of the countries were aware of the plight of people in the economy and the government launched social assistance programs to help the poor of the country. However, the results of these were not immediately felt because of the bottlenecks that had existed in various sectors during that period. Therefore, there were delays in response of the programs to improve the plight of the poor (Ajwad, n.d.). The report had applied the concept of GDP to measure the reduction in economic growth of the country and its consequent effect on the labour market. GDP measures the total income earned domestically, including the income earned by foreign factors of production, whereas GNP measures the income earned by all residents of the nation, including factors of production from abroad (Lochner, 2013). GDP was used as it captured the economic performance of the geographic region that is under study. If residents of the country