Person:
Lederman, Daniel

Office of the Regional Chief Economist, Middle East and North Africa Region

Fields of Specialization

International trade, Labor markets, Growth, Private Sector Development, Public Sector and Governance, Financial Sector

Last updated April 5, 2023

Biography

In January 2018 Daniel Lederman became Lead Economist and Deputy Chief Economist for the Middle East and North Africa Region of the World Bank Group. Previously he served as Deputy Chief Economist for Latin America and the Caribbean, Lead Trade Economist in the World Bank's International Trade Department (PRMTR), Senior Economist in the Development Research Group (DECRG), and Senior Economist and Economist in the Office of the Chief Economist for Latin America and the Caribbean. Before joining the World Bank in 1995, he worked for the United Nations’ Economic Commission for Latin America and the Caribbean. An economist and political scientist by training, Mr. Lederman has published numerous books and articles on a broad set of issues related to economic development, including financial crises, crime, political economy of economic reforms, economic growth, innovation, international trade and labor markets.

Full item page

Publication Search Results

Now showing 1 - 10 of 104

Entrepreneurship and the Extensive Margin in Export Growth : A Microeconomic Accounting of Costa Rica’s Export Growth during 1997-2007

(World Bank, 2011-10-18) Lederman, Daniel ; Rodríguez-Clare, Andrés ; Yi Xu, Daniel

Successful exporting countries are often seen as successful economies. This paper studies the role of new exporting entrepreneurs – defined as firms that became exporters – in determining export growth in a fast growing and export oriented middle-income country i.e., Costa Rica during 1997-2007. It provides a detailed description of the contribution of export entrepreneurs in the short and long run, and comparing the observed patterns with an emerging literature on the role of the “extensive” margin in international trade. On a year-by-year basis, the rate of firm turnover into and out of exporting is high, but exit rates decline rapidly with age (i.e., the number of years the firm has been exporting). On average, about 30 percent of firms in each year tend to exit export activities, and a similar percentage of firms enter. The exiting and entering firms tend to be significantly smaller than incumbent firms in terms of export value (e.g., entrants export about 30 percent less on average than incumbent firms). These findings are consistent with existing evidence for other middle income Latin American countries. However, in the long run new product-firm combinations (i.e., product-firm combinations not present in 1997) account for almost 60 percent of the value of exports in 2007. Surviving new exporters actively adopted new products (for the firm, but not necessarily new for the country) and abandoned weaker existing products they start with, and their export growth rates were very high during a period (1999-2005) when those of incumbent exporting firms were actually negative.
A Mapping of Labor Mobility Costs in Developing Countries

(World Bank, Washington, D.C., 2013-08) Artuç, Erhan ; Lederman, Daniel ; Porto, Guido

Estimates of labor mobility costs are needed to assess the responses of employment and wages to trade shocks when factor adjustment is costly. Available methods to estimate those costs rely on panel data, which are seldom available in developing countries. The authors propose a method to estimate mobility costs using readily obtainable data worldwide. The estimator matches the changes in observed sectoral employment allocations with the predicted allocations from a model of costly labor adjustment. This paper estimates a world map of labor mobility costs and uses those estimates to explore the response of labor markets to trade policy.
Income, Wealth, and Socialization in Argentina: Provocative Responses from Individuals

(World Bank, Washington, D.C., 2002-04) Lederman, Daniel

Lederman focuses on two objectives in his study: (1) to establish a baseline measurement of the level and geographic distribution of social capital in Argentina, and (2) to identify its empirical determinants. The study's survey questionnaire provides individual-level data on the population's participation in social organizations and willingness to trust members of its community. Probit models are estimated to explain the individual's decision to participate and to trust strangers, and individual-household and community characteristics are used as explanatory variables. Potential simultaneity and endogeneity problems afflicting the empirical models are examined. The main determinants of the probability of participation in Argentina are age, age squared, household income (and perhaps income squared), rural communities (perhaps due to lower probabilities of migration among rural residents since most migrants live in urban centers), community or provincial unemployment rates, and individual trust. In contrast, the main determinants of trust are age and age squared (but with opposite signs to those exhibited by probability of participation), household wealth (but not its squared term nor household income), participation (as shown by the Seemingly Unrelated Regressions Probit results on the cross-correlation between the two social capital models), and community or provincial unemployment rates and income inequality. It is noteworthy that the common question on trust used in the U.S. General Social Survey and in the World Values Survey yields results whereby communities with higher "trust" rates actually have lower social participation rates. Finally, participation in organizations with participatory leadership selection mechanisms are more likely to produce interpersonal trust than other forms of participation.
Discovery and Development: An Empricial Exploration of "New" Products

(World Bank, Washington, D.C., 2004-11) Klinger, Bailey ; Lederman, Daniel

The authors use disaggregated export data to explore the relationship between economic discovery and economic development. They find that discoveries, or episodes, when countries begin exporting a new product are not limited to so-called "dynamic" industries. Rather, they also occur in traditional sectors such as agriculture. In addition, the data suggest discovery is a component of the stages of productive diversification that occur with development, following a consistent pattern-discovery activity peaks at the lower-middle income level and then declines. Based on this pattern, the authors show that discovery in the 1990s occurred with a higher than expected frequency in Eastern Europe and Central Asia, and lower than expected frequency in Sub-Saharan Africa. Discovery is not found to be a product of structural transformation based on changing factor endowments across income levels. Beyond export growth, population, and development, there are no significant and positive relationships between the expected drivers of entrepreneurship and the frequency of discovery. Combined with the finding that higher absorptive capacity and lower barriers to entry are associated with a reduction in discovery, this suggests that market failures arising from imitation and free-riding may be inhibiting the emergence of new export products in developing countries.
Tracking NAFTA's Shadow 10 Years On : Introduction to the Symposium

(Published by Oxford University Press on behalf of the World Bank, 2005-12-27) Lederman, Daniel ; Serven, Luis

The North American Free Trade Agreement (NAFTA) is arguably the first case study of what may be expected from the increasing number of preferential trade agreements involving both developed and developing economies. Ten years after the treaty's inception, it is time to assess how its outcomes compare with initial expectations. The articles in this symposium issue provide insights into the effects of NAFTA on economic geography, trade, wages and migration, and foreign investment from Mexico's perspective. The contributions paint a complex post-NAFTA reality characterized by persistent intra-bloc trade barriers, interregional inequality within Mexico, labor market outcomes that seem closely tied to migration patterns and international trade and investment, and foreign investment flows that appear weakly related to trade agreements.
What Drives Short-Run Labor Market Volatility in Offshoring Industries? Evidence from Northern Mexico during 2007–2009

(World Bank, Washington, D.C., 2012-11) Kaplan, David S. ; Lederman, Daniel ; Robertson, Raymond

Recent research shows that employment in Mexico's offshoring maquiladora industries is twice as volatile as employment in their U.S. industry counterparts. The analyses in this paper use data from Mexico's social security records and U.S. customs between the first quarter of 2007 and the last quarter of 2009 to identify four channels through which economic shocks emanating from the United States were amplified when transmitted into Mexico's offshoring labor market of Northern Mexico. First, employment and imports within industries are complements, which is consistent with imports being used as inputs for the assembly of exportable goods within industries. That is, when imports fell during the crisis, employment in Mexico was reduced rather than protected by the fall of imports. Second, contrary to other studies, employment is more responsive than wages to trade shocks. Third, fluctuations in Mexico-U.S. trade were associated with changes in the composition of employment, with the skill level of workers rising during downturns and falling during upswings. This implies that the correlation between average wages and trade shocks is partly driven by labor-force compositional effects, which may obscure individual-worker wage flexibility. Fourth, trade shocks affecting related industries (industries linked by employment flows affect employment at least as much as own-industry trade shocks, thus amplifying employment volatility through the propagation of shocks across industries within Northern Mexico. Furthermore, the data suggest that the observed fluctuations in U.S.-Mexico trade at the onset of the Great Recession in the U.S. were not associated with pre-existing employment trends in Northern Mexico.
Monitoring Export Vulnerability to Changes in Growth Rates of Major Global Markets

(World Bank, Washington, DC, 2012-11) Hollweg, Claire H. ; Lederman, Daniel ; Reyes, José-Daniel

Interest in assessing the impacts on developing countries of changes in major markets' economic performance has risen in tandem with global economic uncertainty over short- and medium-term growth prospects. This paper proposes a methodology to measure the vulnerability of a country's exports to fluctuations in the economic activity of foreign markets. Export vulnerability depends first on the overall level of export exposure, measured as the share of exports in gross domestic product, and second on the sensitivity of exports to fluctuations in foreign gross domestic product. The authors capture this sensitivity by estimating origin-destination specific elasticities of exports with respect to changes in foreign gross domestic product using a gravity model of trade. Furthermore, export vulnerability is computed separately for commodities and differentiated products. This methodology is applied to six developing countries, one from each World Bank region, selected to be otherwise similar yet differ in terms of the level of exposure to major global markets as well as the product composition of their export basket. Although the results suggest differences in elasticity estimates across regions as well as product categories, the principal source of international heterogeneity in export vulnerability results from differences in export exposure to global markets. This result calls for developing countries to diversify their export markets rather than shielding themselves from international markets, which would actually raise economic risk and vulnerability.
From Natural Resources to the Knowledge Economy : Trade and Job Quality

(Washington, DC: World Bank, 2002) de Ferranti, David ; Perry, Guillermo E. ; Lederman, Daniel ; Maloney, William E.

The study questions whether, after a decade of remarkable progress in trade reform, Latin America and the Caribbean really integrates into the global market, offering a promising rapid growth, and good jobs for its workers. For despite the incidence of the loosely called "knowledge economy", the concern prevails that most countries' rich natural resources, still are the determining factor for exports. Policy recommendations include fostering openness to trade, market access, and foreign direct investment flows, in addition to building human capital, institutions, and public infrastructure, without disregarding the natural advantages. To this end, policymakers should aim at developing educational systems that provide quality education, focused on lifelong learning, and training activities to build human capital. Emphasis should follow on research and development (R&D) incentives, and innovations systems, arguing that countries should experiment with taxation incentives, and subsidies to promote both private, and public investments in R&D, (dependent on the institutional capacity of governments to enforce tax laws, and monitor the quality of investments). Moreover, evidence in this report, suggests that information, and communications technology (ICT) can reduce coordination costs, enabling an effective industrialization, and market access.
Lessons from NAFTA for Latin America and the Caribbean

(Palo Alto, CA: Stanford University Press, 2004-11) Lederman, Daniel ; Maloney, William F. ; Servén, Luis

Analyzing the experience of Mexico under the North American Free Trade Agreement (NAFTA), "Lessons from NAFTA" aims to provide guidance to Latin American and Caribbean countries considering free trade agreements with the United States. The authors conclude that the treaty raised external trade and foreign investment inflows and had a modest effect on Mexico's average income per person. It is likely that the treaty also helped achieve a modest reduction in poverty and an improvement in job quality.
Trade, Informal Employment and Labor Adjustment Costs

(World Bank, Washington, DC, 2013-09) Arias, Javier ; Artuc, Erhan ; Lederman, Daniel ; Rojas, Diego

Informal employment is ubiquitous in developing countries, but few studies have estimated workers' switching costs between informal and formal employment. This paper builds on the empirical literature grounded in discrete choice models to estimate these costs. The results suggest that inter-industry labor mobility costs are large, but entry costs into informal employment are significantly lower than the costs of entry in formal employment. Simulations of labor-market adjustments caused by a trade-related fall in manufacturing goods prices indicate that the share of informally employed workers rises after liberalization, but this is due to entry into the labor market by previously idle labor.