acquired fewer important firm-specific skills (World Bank, 2009). There are also concerns that firms could shed female workers first because they are less attached to the labor market, due to child-rearing career disruptions, or because they are less likely to be bread winners. During the Asian financial crisis, South Korean women experienced 7 times higher lay off rates than men (Seguino, 2009). Another possibility is that labor regulations affect firms’ demand for certain groups during a crisis. Minimum wages, for example, may reduce firms’ downward wage flexibility for young and unskilled workers, who tend to earn lower wages. This could lead to greater reductions in employment and increases in unemployment among these groups. Finally, existing employment protection legislation such as severance pay, restrictions on collective dismissals, and conditions for termed contracts can also disproportionally affect new workers vis-à-vis incumbent ones. Indeed, the proportion of youth in temporary contracts, who would have limited benefit packages, is rising in the advanced economies (OECD, 2010). However, there is little evidence on the impacts of labor market regulations on particular groups during a crisis. While one study suggested that employment protection legislation may have prevented a surge of layoffs among young workers in Europe (Verick, 2009), evidence on how these regulations affect different types of workers during a crisis remains limited.

_The third main mechanism that can contribute to differential impacts on employment and unemployment is household labor supply decisions._ The most commonly invoked pattern is the added worker effect, where women compensate for falls in household income by rejoining the workforce. Studies suggest that female labor force participation is counter-cyclical, especially for poorer, lesseducated workers in low income economies (Sabarwal et al., 2011; Choudhry et al., 2010). During Argentina’s financial crisis, for example, job exits increased for both men and women, but women experienced smaller employment losses due to an increase in job entry.<sup>5</sup> In theory, youth could face similar pressures; families facing job loss or a fall in real income may withdraw youth from school, or idle youth may be forced to work. Evidence from the Mexican tequila crisis, however, indicates that most of the burden of the adjustment, in terms of increased labor force participation, fell on wives rather than children (Skoufias and Parker, 2006). In rural areas, employment declines may be smaller, if women and youth joining the workforce find it particularly convenient to enter family businesses, which are more common in rural areas.

_How have these three mechanisms affected the vulnerability of different groups during downturns?_ While several studies have examined households’ vulnerability to crises, fewer have documented their effects on individual workers.<sup>6</sup> Most studies of crisis impacts focus on Europe and the United States (Verick, 2009, OECD, 2010, Elsby et al., 2010,) or highlight the experience of particular groups or countries (ILO 2010a, 2010b, Ha et al., 2010, Sabarwal et al., 2011, Leung et al., 2009).

_The best existing evidence on the effect of past crises on workers’ income and employment exploits longitudinal data from Indonesia and Urban Argentina._ Men and women experienced equally

> 5 See McKenzie (2004).

> 6 Households’ vulnerability and response to economic crises has been explored in Peru (Glewwe and Hall, 1998), Mexico (Cunningham and Maloney, 2001 and Mckenzie, 2004), Russia (Lokshin and Ravallion, 2003), Indonesia (Strauss et al., 2004) and Argentina (Corbacho et al., 2007), among others.

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