Person:
Robalino, Robalino, David A.

Labor and Youth, Human Development Network, World Bank, Employment and Development Program, German Institute of Labor (IZA)
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Labor markets, Social Insurance
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Labor and Youth, Human Development Network, World Bank
Employment and Development Program, German Institute of Labor (IZA)
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Last updated January 31, 2023
Biography
David Robalino is the Lead Economist and Leader of the Labor and Youth Team in the Human Development Anchor of the World Bank.  He also serves as Co-Director of the Employment and Development program at IZA – the Institute for the Study of the Labor.  Since joining the Bank David has been working on issues related to social security, labor markets and fiscal policy. He has worked in several countries in Latin America, the Middle East and North Africa, Sub-Saharan Africa, and Asia.  David has published on issues related to macroeconomics and labor markets, social insurance and pensions, health financing, the economics of HIV/AIDS, and the economics of climate change.  More recently David has been working on issues related to the design of unemployment benefits systems in middle income countries, the extension of social insurance programs to the informal sector, and the integration of social protection and education/training policies to improve labor market outcomes and productivity growth.  Prior to joining the Bank David was a researcher at the RAND Corporation where he was involved in research on health, population and labor, climate change, and the development of quantitative methods for policy analysis under conditions of uncertainty.  David also served in the Presidential Committee for Social Security Reform in Ecuador.  David did his graduate studies at the Sorbonne University in Paris and the RAND Graduate School in Santa Monica – California.  

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    On the Financial Sustainability of Earnings-Related Pension Schemes with 'Pay-as-You-Go' Financing and the Role of Government-Indexed Bonds
    ( 2009) Robalino, David A. ; Bodor, Andras
    In this paper we reconsider the idea of an earnings-related pension system with reserves invested in indexed government bonds as a mechanism to both ensure financial sustainability and improve security. The paper starts by reviewing the characterization of the sustainable rate of return of an earnings-related pension system with pay-as-you-go financing. We show that current proxies for the sustainable rate, including the Swedish 'gyroscope', are not stable and propose an alternative measure that depends on the growth of the buffer-stock and the pay-as-you-go asset. Using a simple one-sector macroeconomic model that embeds a notional account pension system we then show how GDP-indexed government bonds, if combined with the right measure for the sustainable rate of return on contributions, could be used to generate a sustainable and secure earnings-related pension system, without becoming a fiscal burden. The proposal is particularly attractive for countries considering reforms to earnings-related systems that have accumulated a large implicit pension debt. In this case, the government bonds allow the financing of this debt in a transparent way. The proposed mechanism can also facilitate the transition to a fully funded pension system when the government bonds are allowed to be traded.