Person:
Cunningham, Wendy

Global Practice on Social Protection and Labor

Fields of Specialization

Labor economics, Development economics, Human development theory

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Global Practice on Social Protection and Labor

Last updated May 1, 2023

Biography

Wendy Cunningham, a U.S. national, is a Lead Economist in the World Bank’s Social Protection and Labor Practice. In this role, she is responsible for working with client countries to develop and implement policies and programs to improve labor market access and success, particularly for more vulnerable populations. Her research focuses on measurement and programming around skills-for-the labor market, with a particular focus on socio-emotional skills. She has a strong publications record on labor markets, informal employment, gender, and youth development. Previously, she had been the World Bank’s Program Leader for Human Development and Poverty in Mexico and Colombia, and the Coordinator for the World Bank’s program on Child and Youth Development. She holds a Ph.D. in Labor Economics from the University of Illinois Urbana-Champaign.

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Now showing 1 - 10 of 36

The Home as Factory Floor: Employment and Remuneration of Home-Based Workers

(World Bank, Washington, D.C., 2004-05) Cunningham, Wendy ; Gomez, Carlos Ramos

Home-based work, defined as nonprofessionals who perform market work from their homes, is an increasingly recognized form of employment in Latin America. The majority of the research on this segment of the labor force relies on small sample, qualitative data, which find that home-based workers are women, children, and adults with disabilities with low skills who work long hours for low wages. The authors use a large random sample of control groups of non-home-based workers, including men, in their analysis and examine the home-based work sector in Brazil, Ecuador, and Mexico in 1999. Their results show that in all three countries, women are overrepresented among home-based workers, particularly older women, those with low levels of education, and those with children or spouses, unlike men for whom these factors do not matter. Female home-based workers earn 25-60 percent less an hour than do non-home-based working women and they work one-third to one-half as many hours each week. Home-based working men, on the other hand, earn 0-17 percent less than do men who do not work from their homes, and they only work 10 percent fewer hours a week. The wage and work hour gaps for women are largely related to marital status, not the presence of children, suggesting that simply being the primary caregiver in the household, regardless of the actual time constraints (children) is the key factor to differences between home-based working women and those who work outside of their homes.
The Distribution of Income Shocks during Crises : An Application of Quantile Analysis to Mexico, 1992-95

(Washington, DC: World Bank, 2004-05) Maloney, William F. ; Cunningham, Wendy V. ; Bosch, Mariano

Moving beyond the simple comparisons of averages typical of most analyses of household income shocks, this article employs quantile analysis to generate a complete distribution of such shocks by type of household during the 1995 crisis in Mexico. It compares the distributions across normal and crisis periods to see whether observed differences were due to the crisis or are intrinsic to the household types. Alternatively, it asks whether the distribution of shocks during normal periods was a reasonable predictor of vulnerability to income shocks during crises. It finds large differences in the distribution of shocks by household types both before and during the crisis but little change in their relative positions during the crisis. The impact appears to have been spread fairly evenly. Households headed by people with less education (poor), single mothers, or people working in the informal sector do not appear to experience disproportionate income drops either in normal times or during crises.
Employer Voices, Employer Demands, and Implications for Public Skills Development Policy

(World Bank, Washington, DC, 2014-05) Cunningham, Wendy ; Villasenor, Paula

Educators believe that they are adequately preparing youth for the labor market while employers lament the lack of skills. A possible source of the mismatch in perceptions is that employers and educators have different understandings of the types of skills valued in the labor market. This paper uses economics and psychology literature to define four skills sets: socio-emotional, higher-order cognitive, basic cognitive, and technical skills. The paper reviews the literature that quantitatively measures employer skill demand, as reported in preference surveys. A sample of 28 studies reveals remarkable consistency across the world in the skills demanded by employers. Although employers value all skill sets, there is a greater demand for socio-emotional and higher-order cognitive skills than for basic cognitive or technical skills. These results are robust across economy size and level of development, sector, export-orientation, and occupations. Employers perceive that the greatest skills gaps are in socio-emotional and technical skills. These findings suggest the need to re-conceptualize education and training systems. Taking into consideration the developmental process to acquire the skills identified by employers, this implies the need to recognize that (a) the job-skills development process necessarily begins at birth and continues throughout the life cycle so skills policy should, as well; (b) schools play a relevant, but limited, role in skills development and the role of parents, mentors, and the work place must be defined and enhanced; and (c) the skills most demanded by employers -- higher-order cognitive and socio-emotional skills -- are largely taught (the former) or refined in secondary school, which argues for a general education until these skills are formed.
Sectoral Allocation by Gender of Latin American Workers over the Liberalization Period of the 1990s

(World Bank, Washington, DC, 2001-12) Cunningham, Wendy V.

The recent restructuring of Latin American economies has renewed interest in the effects of trade liberalization, on labor markets, and on the gender division of labor. The author does not attempt to establish casuality between economic reforms, and the types of jobs that men and women hold. Instead, she provides a detailed description of the trends in male, and female formal, and informal sector participation during the economic reform period in Argentina, Brazil, and Costa Rica. The author first compares the gender composition of the formal, informal wage, and self-employment sectors in a year before reforms (1988 for Argentina, 1989 for Brazil, and Costa Rica), and a year after reforms implementation (1997 for Argentina, 1995 for Brazil and Costa Rica). Although women continued to be more likely than men to work in the informal wage sector, there is no trend of "masculinization" or "feminization" of the informal sector, or any other. Instead, in Argentina men have overtaken women as the most prevalent workers in the informal wage sector, while in Brazil, the opposite has occurred (as men move into self-employment). In Costa Rica there have been no statistical, observable changes. The author then considers the distribution across sectors within each gender group, to identify whether men, and women are more likely to select different sectors in the post-reform period relative to the pre-reform period. Among both men, and women in all three countries (except Brazilian men), workers have become more likely to hold informal wage jobs, and less likely to hold formal sector jobs. Trends in human capital accumulation explain these changes for both men, and women, while changes in gender roles, primarily in homecare and marriage, do not seem to have an effect.
Breadwinner or Caregiver? How Household Role Affects Labor Choices in Mexico

(World Bank, Washington, DC, 2001-12) Cunningham, Wendy V.

Recent volatility in the Mexican economy, has required households to alter patterns of participation in the labor force, voluntarily or not. The author uses panel data to examine patterns of labor force entry among adult men, and women with different household responsibilities, asking whether gender is a primary determinant, shaping these patterns. She finds that labor supply patterns are driven more by household role, than by gender. Heads of households, regardless of sex, behave similarly. Women who have neither spouses, nor children behave more like men, than like married women. They are also more likely than any other group to have inflexible, higher-paying jobs in the formal sector - which raises the question: Do employers discriminate, based on gender, or on household structure? She also detects a strong added-worker effect among secondary workers, a result not detected in the labor markets of developed countries that have social insurance programs. Finally she finds that wives' choice of sector during downturns, is subject to the households' earning needs, that husbands use informal wage, or contract employment as an employer of last resort, only in response to negative income shocks to the household, and that single mothers do not select the informal sector over the formal sector in response to either expected, or realized negative income shocks. The policy implications? Interventions that target women aren't necessarily appropriate, because women are heterogeneous. And programs that aid household heads - male or female - should be directed toward employment that will last beyond the economic shock.
Measuring the Impact of Minimum Wages : Evidence from Latin America

(World Bank, Washington, DC, 2001-04) Maloney, William F. ; Nunez, Jairo ; Cunningham, Wendy ; Fiess, Norbert ; Montenegro, Claudio ; Murrugarra, Edmundo ; Santamaria, Mauricio ; Sepulveda, Claudia

The authors provide an overview of minimum wage levels in Latin America and their true impact on the distribution of wages, using both numerical measures and kernal density plots for eight countries (Argentina, Bolivia, Brazil, Chile, Colombia, Honduras, Mexico, and Uruguay). They especially try to identify "numeraire" effects--where the minimum is used as a reference higher in the wage distribution--and "lighthouse" effects--where it influences wage setting in the unregulated or "informal" sector. Their main findings: First, statutory minimum wages are often misleading, and graphical methods may be more reliable. Second, the minimum wage's effect on wage setting extends far beyond what is usually considered and probably beyond the effect in industrial countries. Using panel employment data from Colombia, where minimum wages seem high and binding, the authors quantify the minimum wage's effects on wages and on the probability of becoming unemployed. The Colombian case confirms the evidence offered by kernal density estimates: 1) The minimum wage can have an important impact on wage distribution in the neighborhood of the minimum wage. 2) The effects echo up the wage distribution in a clear demonstration of the "numeraire" effect. That this effect is stronger in Latin America than in the United States suggests that the minimum wage induces further-reaching rigidities in the labor market. The trade-off between any possible effect on poverty and reduced flexibility is likely to be more severe in countries where this is the case. The effects on employment, and unemployment, are substantial. 3) Informal salaries wages are also affected, confirming the graphical evidence of strong lighthouse effects. Self-employment earnings are not, however, confirming that the minimum wage is not simply serving as a measure of inflationary expectations.
Early Identification of At-Risk Youth in Latin America : An Application of Cluster Analysis

(World Bank, Washington, DC, 2007-10) Bagby, Emilie ; Cunningham, Wendy

A new literature on the nature of and policies for youth in Latin America is emerging, but there is still very little known about who are the most vulnerable young people. This paper aims to characterize the heterogeneity in the youth population and identify ex ante the youth that are at-risk and should be targeted with prevention programs. Using non-parametric methodologies and specialized youth surveys from Mexico and Chile, the authors quantify and characterize the different sub-groups of youth, according to the amount of risk in their lives, and find that approximately 20 percent of 18 to 24 year old Chileans and 40 percent of the same age cohort in Mexico are suffering the consequences of a range of negative behaviors. Another 8 to 20 percent demonstrate factors in their lives that pre-dispose them to becoming at-risk youth - they are the candidates for prevention programs. The analysis finds two observable variables that can be used to identify which children have a higher probability of becoming troubled youth: poverty and residing in rural areas. The analysis also finds that risky behaviors increase with age and differ by gender, thereby highlighting the need for program and policy differentiation along these two demographic dimensions.
Earnings Inequality Within and Across Gender, Racial, and Ethnic Groups in Four Latin American Countries

(World Bank, Washington, DC, 2008-04) Cunningham, Wendy ; Jacobsen, Joyce P.

Latin American countries are generally characterized as displaying high income and earnings inequality overall along with high inequality by gender, race, and ethnicity. However, the latter phenomenon is not a major contributor to the former phenomenon. Using household survey data from four Latin American countries (Bolivia, Brazil, Guatemala, and Guyana) for which stratification by race or ethnicity is possible, this paper demonstrates (using Theil index decompositions as well as Gini indices, and 90/10 and 50/10 percentile comparisons) that within-group earnings inequality rather than between-group earnings inequality is the main contributor to overall earnings inequality. Simulations in which the relatively disadvantaged gender and/or racial/ethnic group is treated as if it were the relatively advantaged group tend to reduce overall earnings inequality measures only slightly and in some cases have the effect of increasing earnings inequality measures.
Youth Well-Being in Brazil : An Index for Cross-Regional Comparisons

(World Bank, Washington, DC, 2007-04) Dell'Aglio, Debora ; Cunningham, Wendy ; Koller, Silvia ; Cassepp Borges, Vicente ; Severo Leon, Joana

This study constructs three indices to measure how well Brazil's young people are surviving their transition to adulthood. Youth development is difficult to quantify because of the multi-dimensionality of youth behavior. Most monitoring use individual indicators in specific sectors, making it difficult to track overall progress. The study adapts to the Brazilian case a methodology developed by Duke University to measure the well-being of U.S. children and youth. It uses readily available data to construct three indices for each Brazilian state based on 36 indicators encompassing the health, behavior, school performance, institutional connectedness, and socioeconomic conditions. The indices conclude that young people in the states of Santa Catarina and the Federal District are doing particularly well and those in Alagoas and Pernambuco are the worst off. While these rankings are expected to continue into the next generation, young people in other states have a brighter (Espiritu Santo) or more dismal (Rio Grande de Sul, Tocatins) future due to underinvestment in today's children. Still others (Rio de Janeiro) are underutilizing their resources so their young citizens are in a worse situation than they could be if the state were to invest more. The hope is that the methodology can be used in Brazil as it has been used in the United States to estimate the indices annually, thus allowing policymakers, young people, and society to track the well-being of youth in each state over time.
Do Minimum Wages in Latin America and the Caribbean Matter? Evidence from 19 Countries

(World Bank, Washington, DC, 2006-03) Kristensen, Nicolai ; Cunningham, Wendy

Despite the existence of minimum wage legislation in most Latin American countries, there is little empirical evidence demonstrating its impact on the distribution of wages. In this study the authors analyze cross-country data for 19 Latin American and Caribbean (LAC) countries to gain an understanding of if and how minimum wages affect wage distributions in LAC countries. Although there is no single minimum wage institution in the LAC region, the authors find regional trends. Minimum wages affect the wage distribution in both the formal and, especially, the informal sector, both at the minimum wage and at multiples of the minimum. The minimum does not uniformly benefit low-wage workers: in countries where the minimum wage is relatively low compared to mean wages, the minimum wage affects the more disadvantaged segments of the labor force, namely informal sector workers, women, young and older workers, and the low skilled, but in countries where the minimum wage is relatively high compared to the wage distribution, it primarily affects wages of the high skilled. This indicates that the minimum does not generally lift the wages of all, but instead, it offers a wage into which employers can "lock in" wages that are already near that level. Thus, minimum wage legislation is more far-reaching than originally thought, affecting both the uncovered informal sector and those earning above the minimum. In addition, the relative level of the minimum wage is important for determining whose wages are affected.