Understanding How Transition Shocks Affect Jobs : Toolkit to Help Policymakers Prepare for Job Displacement and Facilitate Labor Transition following a Persistent Shock

Overview & Synopsis

This note provides technical guidance on how to evaluate the potential negative labor impacts of a transition shock. It builds on existing World Bank Jobs Diagnostics approaches that consider macro-structural, population and labor market dynamics and institutional factors that shape the pre-transition context. This underlying context will determine how the shock is transmitted through the labor market, which groups will be affected and to what degree. For each tool, the note includes guidance on the research questions to be analyzed, data requirements and data sources that can be utilized, methodologies for analysis, and potential uses of the results. The tools are data-intensive; some rely on commonly available data sources such as national labor force surveys, and some require new data collection. Practical examples from recent applications of these methodologies will help to illustrate the tools. The measurement tools cover four dimensions of labor adjustment and transition following a persistent shock: (i) understanding the local socioeconomic context in which the transition shock will unfold, (ii) measuring the absolute and relative magnitudes of the workforce at risk of losing their livelihoods, (iii) assessing affected workers’ technical capacity and non-technical readiness to transition to new job opportunities, and (iv) identifying viable job transition pathways.