Asia-Pacific labour market insights

Job retention schemes help offset COVID-19 labour market impacts in Asia and the Pacific

Article | 14 July 2021
Asia-Pacific labour markets were devastated in 2020 by containment measures to reduce the spread of the COVID-19 pandemic and the consequent economic slowdown. Policymakers throughout the region leveraged various tools to counter the adverse impacts on jobs, including temporary employment protection schemes.

A new ILO technical note COVID-19 and employment protection policies: A quantitative analysis of the Asia-Pacific region highlights the effect of job retention programmes on safeguarding employment and working hours during the crisis. Based on a rigorous compilation of information and statistics related to the implementation of employment protection policies in 37 Asia-Pacific economies, the note quantifies the extent to which such measures were utilized in 2020 and highlights important policy design features that have helped to support some of the most vulnerable workers. It examines trends in working-hour and employment losses in relation to the speed and scale of the job retention policies in different economies, while also presenting an in-depth examination of the country case of the Philippines Small Business Wage Subsidy scheme. The note concludes with several important considerations that can help policymakers navigate the prolonged crisis and foster an inclusive, resilient and human-centred recovery.

Highlights include:

  • Across the Asia-Pacific region, 26 of 37 economies implemented in 2020 a new (or adjusted an existing) employment protection scheme in response to the crisis.
  • Overall, working-hour losses were lower among economies that implemented a scheme for four months or longer compared to cases of shorter policy duration.
  • Agile policy action is important to provide immediate support to impacted workers during a crisis and appears to have a positive impact on reducing working-hour losses.
  • Empirical evidence from the Philippines case suggests that there may be a positive association between a greater amount of employment protection policy expenditure and a decrease in employment losses, particularly among women workers.

Conclusions and policy recommendations include:

  • Although fiscal constraints can limit the capacity to leverage employment retention policies, such measures, if well-designed, can help address equity concerns and support the hardest hit workers, including women and youth, during a crisis.
  • Decisive policy making can potentially have a significant effect on providing immediate relief to impacted workers and sustain incomes. To this end, establishing a job retention scheme, even if limited, that can be quickly scaled up during a crisis can provide substantial benefits.
  • There is an urgent need to promote employment formalization in developing Asia and the Pacific. Such efforts would greatly expand the policy instruments and support mechanisms available during a crisis to reach the most vulnerable workers. 

For further information please contact:

Phu Huynh
Employment and Decent Work Specialist