CitationChzhen, Yekaterina; Nolan, Brian; Cantillon, Bea; & Handa, Sudhanshu (2017). Impact of the Economic Crisis on Children in Rich Countries.. Cantillon, Bea; Chzhen, Yekaterina; Handa, Sudhanshu; & Nolan, Brian (Eds.) (pp. 8-29). Oxford, England: UNICEF.
AbstractThe global financial crisis of 2007-8 originated in the banking sector in the US, quickly spread to the rest of the world and pushed it into recession in 2009. The economic crisis affected households in developed countries through three main channels: the labour market, the financial market, and the public sector (Natali et al., 2014). Falling demand for goods and services lead to a worsening in labour market conditions, including job losses, reduced hiring and promotion, stunted wage growth, and an increased reliance on temporary contracts. Turbulence in the financial markets resulted in dwindling asset values and restricted access to credit. As governments intervened by bailing out financial institutions and stimulating the economy in the earlier phase of the crisis, and as social transfers increased automatically with rising unemployment, while tax revenues fell, public debt soared, and government finances came under increased pressure from international markets. Five Eurozone countries--Cyprus, Greece, Ireland, Portugal, and Spain--were unable to repay or refinance their government debt and requested assistance from the International Monetary Fund, the European Commission, and the European Central Bank ('the Troika'). In the second phase of the crisis, roughly from 2011 onwards, many governments were implementing austerity policies by tightening access to benefits, reducing social transfers, cutting spending on services and increasing taxes such as VAT (OECD, 2014).
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