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Unformatted text preview: grew to 14.2 percent in October 2008, a 0.2 percentage point increase with respect to April 2008. The conventional unemployment rate leveled off at 4.2 percent, after five consecutive semesters in decline. Meanwhile, the inactivity rate increased for a second consecutive semester to 44.6 percent: the highest since April 2004. The former rates can be interpreted as early indicators of worsening labor market conditions (see Figure 17). Another indicator is the deceleration in the number of workers affiliated to the Dominican Republic pension system. During most of years 2007 and 2008, the annual increase of affiliated workers was above 8%. In the last quarter of 2008, the rates of growth declined noticeably (see Figure 19) Annual data for real wages have recorded a slight increase in 2008, although still remain well below the levels before the financial crisis of 2004 (see Figure 18). Monthly data from the Pension System shows that the increase in real wages among affiliated workers occurred during the second part of year 2008 (see Figure 20). 92 Dominican Republic Labor Market Indicators (2006‐2009) Figure 17 Figure 18 Earnings in the formal and informal sector Unemployment and Inactive population
25.0 20.0 45.0 40 50.0 40.0 10.0 35.0 20 15 10 25.0 5 2008 2007 2006 2005 2004 2000 2003 0 2002 0.0 25 2001 30.0 30 Apr-00
Oct-08 5.0 Real DR $ per hour (base 2000) 15.0 Inactives - Percentage of working age population Unemployment - Percentage of the Labor force 35 Year unemployment (conventional definition) unemployment (broad definition) inactive informal employment earnings Figure 19 f ormal employment wages Figure 20 Change in real wages 75.0% 1000000 15% 10% 250000 0.0% Change in Real Wages (percentage) 25.0% 5% 0% -5% -10% 2009 July 2008 July July 2007 2009 2008 2007 months 2006 -15% -25.0% 0
2006 Nomber of workers 500000 Percent change 50.0% 750000 Months
Real wages f or workers with social security change in social security af filiates (YoY) social security af filiates Recent Labor Market Policies The Government of the Dominican Republic initially responded to the crisis by creating a social dialogue mechanism called “National Unity Summit to confront the International Crisis”. The Summit deals with a wide range of issues, among them employment and social policy. As a result of this dialogue, many specific proposals have been suggested in relation to (i) employment generation, (ii) support to micro and medium enterprises, (iii) temporary employment programs, (iv) boosting housing construction, and (v) supporting business incubation centers More recently, the government has announced a one year extension of health coverage for unemployed workers who earned less than DR$10.000 (around US$285) and their families. Furthermore, a US$ 400 m...
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