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This paper reviews the role of Social Protection and Labor in supporting both climate adaptation and mitigation efforts. The Climate Crisis is impacting the poor and vulnerable disproportionally, both as a consequence of climate shocks and through the distributional impacts of climate mitigation policies. The paper discusses how - even without explicit environmental objectives - Social Protection and Labor strengthens resilience against climate shocks. However, integrating crisis-sensitive elements into social protection and labor programs increases substantially their ability to respond to shocks. Social protection and labor programs also facilitate green and Just Transitions by supporting equitable policies and can ease transitions towards Green jobs. Finally, Social protection and labor programs can also directly support mitigation measures by positively affecting behaviors. While investments in climate-related Social Protection and Labor are rapidly expanding, its full potential to support adaptation, decarbonization and mitigation is still to be realized.

Adaptation to Climate Change --- Climate Change Mitigation and Green House Gases --- Environment --- Labor Markets --- Social Protections and Assistance --- Social Protections and Labor

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The authors examine how institutions that enforce contracts between two parties-producers and consumers-interact in a competitive market with one-sided asymmetric information and productivity shocks. They compare an informal enforcement mechanism, reputation, the efficacy of which is enhanced by consumers investing in "connectedness," with a formal mechanism, legal enforcement, the effectiveness of which can be reduced by producers by means of bribes. When legal enforcement is poor, consumers connect more with one another to improve informal enforcement. In contrast, a well-connected network of consumers reduces producers' incentives to bribe. In equilibrium, the model predicts a positive relationship between the frequency of productivity shocks, bribing, and the use of informal enforcement, providing a physical explanation of why developing countries often fail to have efficient legal systems. Firm-level estimations confirm the partial equilibrium implications of the model.

Adverse Selection --- Asymmetric Information --- Business Environment --- Competitiveness and Competition Policy --- Consumers --- Cred Economic Performance --- Debt Markets --- E-Business --- Economic Theory and Research --- Emerging Markets --- Equilibrium --- Expected Utility --- Finance and Financial Sector Development --- Financial Literacy --- Fixed Costs --- Incentives --- Influence --- Insurance and Risk Mitigation --- Investment --- Labor Policies --- Macroeconomics and Economic Growth --- Marginal Costs --- Microfinance --- Moral Hazard --- Prices --- Private Sector Development --- Production --- Productivity --- Property Rights --- Public Sector Development --- Social Protections and Labor --- Theory --- Trade --- Utility

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East Asia has experienced a dramatic decrease in output growth volatility over the past 20 years. This is good news, as output growth volatility affects poor households because of coping strategies that have long-term, harmful consequences, and the overall economy through its negative impact on economic growth. This paper investigates the factors behind this long decline in volatility, and derives lessons about ways to mitigate renewed upward pressure in face of the financial crisis. The authors show that if, on the one hand, high trade openness has sustained economic growth in the past several decades, on the other hand, it has made countries more vulnerable to external fluctuations. Although less frequent terms of trade shocks and more stable growth rates of trading partners have helped to reduce volatility in the past, the same external factors are now putting renewed pressure on volatility. The way forward seems therefore to be to counterbalance the external upward pressure on volatility by improving domestic factors. Elements under domestic control that can help countries deal with high volatility include more accountable institutions, better regulated financial markets, and more stable fiscal and monetary policies.

Business cycle --- Capita growth --- Crisis volatility --- Economic Conditions and Volatility --- Economic growth --- Economic outlook --- Economic performance --- Emerging Markets --- Financial markets --- Fluctuations --- Growth rate --- Growth rates --- Growth volatility --- High trade openness --- Income --- Low-income countries --- Macroeconomic volatility --- Macroeconomics and Economic Growth --- Monetary policies --- Private Sector Development --- Recessions --- Standard deviation --- Trade shocks --- World economy

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This paper studies the trends and cycles of informal employment. It first presents a theoretical model where the size of informal employment is determined by the relative costs and benefits of informality and the distribution of workers' skills. In the long run, informal employment varies with the trends in these variables, and in the short run it reacts to accommodate transient shocks and to close the gap that separates it from its trend level. The paper then uses an error-correction framework to examine empirically informality's long- and short-run relationships. For this purpose, it uses country-level data at annual frequency for a sample of industrial and developing countries, with the share of self-employment in the labor force as the proxy for informal employment. The paper finds that, in the long run, informality is larger in countries that have lower GDP per capita and impose more costs to formal firms in the form of more rigid business regulations, less valuable police and judicial services, and weaker monitoring of informality. In the short run, informal employment is found to be counter-cyclical for the majority of countries, with the degree of counter-cyclicality being lower in countries with larger informal employment and better police and judicial services. Moreover, informal employment follows a stable, trend-reverting process. These results are robust to changes in the sample and to the influence of outliers, even when only developing countries are considered in the analysis.

Active Labor --- Business Cycle --- Economic Theory and Research --- Exogenous Variable --- Informal Economies --- Informal Economy --- Informal Employment --- Informal Labor Markets --- Informal Sector --- Labor --- Labor Force --- Labor Markets --- Labor Organization --- Labor Policies --- Macroeconomics and Economic Growth --- Minimum Wage --- Previous Section --- Productivity Differential --- Productivity Level --- Public Services --- Small Manufacturing --- Social Protections and Labor --- Total Employment --- Worker --- Workers