variation in outcomes across countries. For a given decline in GDP growth, countries with smaller manufacturing sectors, larger export sectors, and less costly redundancy regulations were better able to protect earnings. Finally, the responsiveness of employment growth to changes in GDP growth increased during the crisis, leading simple projections to understate the extent of employment loss during the crisis.

# **Data and Methodology**

_The paper uses data from published quarterly labor market statistics of 45 middle income countries._ 37 of these countries have information on both GDP growth and employment growth, while 31 have information on GDP growth and earnings growth. Most of the countries lie in Latin America or in the Europe and Central Asia region (ECA). We divide the remaining countries into two regions: East Asia and Sri Lanka, and the Middle East and Africa.<sup>5</sup> The main source of primary data sources on labor market and GDP are country statistics published by the relevant country statistical offices and provided, on a subscription basis, to the World Bank by three private data providers—Haver Analytics, CEIC, and EMED—that collect them daily. These data were supplemented by ILO’s laborsta database.<sup>6</sup> Data on other country indicators--such as per capita GDP, and the size of the manufacturing and export sector-come from the World Development Indicators database.

_Data coverage and sources vary across countries and indicators._ GDP, employment, and unemployment statistics are available quarterly for almost all countries in the sample.<sup>7</sup> Many countries, however, do not report earnings and even fewer provide hours. Moreover, hours and earnings are sometimes reported as changes in indices rather than levels. Since data are often missing for particular quarters, the analysis is limited to year-on-year changes for comparable quarters. Tables A2 and A3 in the appendix list the types of surveys used to generate employment and earnings indicators. In three quarters of the countries analyzed, employment statistics were derived from labor force surveys, while in the remaining one fourth, employment levels were obtained from establishment surveys or administrative data. As a result, in a quarter of countries analyzed employment trends may refer only to formal employees. By contrast earnings data comes from establishment surveys in 70 percent of cases and the countries, and in these countries under-represents informal or self-employed workers. In a few countries, (Mexico, Colombia, and Turkey), earnings data from establishment surveys only cover the industrial or manufacturing sectors, and most countries in Eastern Europe only collect earnings data for non-agricultural workers. Finally employment and earnings data often do not cover the full country. At least 16% of countries – typically countries in Latin America, as well as China – only collect employment data in urban areas.

_Results should be interpreted with appropriate caution._ Much of the analysis focuses on the change in the _wage bill_ as a convenient summary measure of the total magnitude of the labor market adjustment borne by workers. The wage bill is the product of employment and average monthly earnings. Given the nature of the data, changes in the wage bills often reflect changes in establishment earnings and total employment. Many of these countries have large informal sectors and the cyclicality of earnings in formal and informal establishments may differ, adding additional uncertainty to our estimates of the precise role

> 5 The five countries from the Middle East and Africa are Egypt, The West Bank, South Africa, Morocco and Mauritius.

> 6 A detailed list of sources and comments on the data are available from the authors upon request.

> 7 Usually, quarterly data is available. However, Peru and Indonesia only have half-yearly results.

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