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
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.  

Publication Search Results

Now showing 1 - 9 of 9
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    Assessing Interactions among Education, Social Insurance, and Labor Market Policies in Morocco
    (Taylor and Francis, 2011-06-24) Marouani, Mohamed A. ; Robalino, David A.
    This article develops a general equilibrium model to assess the impact that integrated reforms of macroeconomic, education and social protection policies can have on employment. The model presents three innovations. First, it formalizes the production of skills in the economy by following sex–age cohorts through the various levels of the education and training systems, given dropout and repetition rates. Second, it incorporates a module that projects social insurance expenditures as a function of the demographic structure of the country and the rules of the pension system. Finally, it develops a very detailed description of the labour market, where informality reflects strategic decisions by workers and not necessarily exclusion. The model is applied to Morocco. The results of various simulations illustrate the importance of coordinating macro, education and social protection policies in order to achieve meaningful effects on employment levels. In particular, we show that isolated interventions to improve the internal efficiency of the education system can aggravate the unemployment problem; that subsidies to investments are more efficient in sectors intensive in skilled labour; and that not controlling the growth of pension expenditures and the tax-wedge can depress employment in the formal sector.
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    Working through the Crisis : Jobs and Policies in Developing Countries during the Great Recession
    (Washington, DC: World Bank, 2014) Banerji, Arup ; Newhouse, David ; Paci, Pierella ; Robalino, David ; Banerji, Arup ; Newhouse, David ; Paci, Pierella ; Robalino, David
    This book looks back both at how the Great Recession affected employment outcomes in developing countries and at how governments responded. The chapters bring together a unique compilation of data and analysis from very different sources, including an inventory of policies implemented during the crisis among countries in Latin America, Eastern Europe, Asia and Africa. The overall story is that the impacts of the crisis varied considerably. The effect depended on the size of the original shock, the channels through which it was manifested, the structure of institutions in the country -- especially labor institutions -- and the specific policy responses undertaken by countries in response to the shock. While these factors led outcomes to differ across the countries studied, a few common patterns emerged. In terms of impacts, overall adjustments involved reductions in earnings growth rather than employment growth, although the quality of employment was also affected. Youth were doubly affected, being more likely to both experience unemployment and reduced wages. Men seemed to have been more strongly affected than women. In most countries where data are available, there were no major differences between skilled and unskilled workers or those living in urban or rural areas. In terms of policy responses, this crisis was characterized by a high prevalence of active interventions in the labor market and the expansion of income protection systems, as well as countercyclical stimulus. Countercyclical stimulus measures in a number of countries, when timed well and sufficiently large to mitigate the shock, were effective in reducing adverse employment effects. Specific sectoral stimulus policies also had positive effects when well-targeted. But social protection and labor market policy responses were often ad-hoc and not in line with the types of adjustments that were taking place. As a result, these policies and programs did not necessarily reach those who needed them the most and typically were biased toward formal sector workers. In retrospect, there is a sense that developing countries were not well prepared to deal with the effects of the Great Recession, suggesting room for important reforms to social protection and labor policies moving forward.
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    Assessing Interactions among Education, Social Insurance, and Labor Market Policies in a General Equilibrium Framework : An Application to Morocco
    (World Bank, Washington, DC, 2008-07) Marouani, Mohamed A. ; Robalino, David A.
    This paper develops a general equilibrium model to analyze the marginal and joint impacts that alternative macroeconomic, education, and social protection policies have on the dynamics of employment and unemployment by skill level. The model introduces a disaggregated treatment of the labor market that incorporates an informal sub-sector in every sector of the economy. The analysis explicitly models the distribution of skills in the labor force by following over time sex-age cohorts across various levels of the education system and in the labor market. And it integrates a module that projects the revenues and expenditures of the pension system. The model is applied to the case of Morocco. Simulations show that even under positive assumptions regarding economic growth, unemployment rates are likely to remain close to current levels in the next decade. The paper argues that only an integrated package of policies that affect the macro-economy, the investment climate, and the education and social protection systems would allow sustainable creation of enough "good quality" jobs.
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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
    (World Bank, Washington, DC, 2006-07) Robalino, David A. ; Bodor, András
    In this paper the authors 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. They start by reviewing the characterization of the sustainable rate of return of an earnings-related pension system with pay-as-you-go financing. The authors 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 they 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.
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    Addressing the Employment Effects of the Financial Crisis : The Role of Wage Subsidies and Reduced Work Schedules
    (World Bank, Washington, DC, 2009-09) Robalino, David ; Banerji, Arup
    This note briefly reviews the experiences with wage subsidies and reduced work schedules in promoting employment and avoiding the depreciation of accumulated skills and knowledge due to a temporary downturn. These policies have been adopted by many high income countries as well as some middle income countries. It is to early o comment on their impact; to date, they have not been rigorously evaluated in the context of the financial crisis. And any results will also be difficult to generalize, since much depends on local conditions and the structure of the labor market. Wage subsidies and reduced work schedules show some promise as measures that can help countries to increase the employment elasticity of growth during the recovery and avoid the depreciation of skills associated with unemployment or informal work. Wage subsidies and reduced work schedules mainly benefit formal sector workers, which represent less than 50 percent of the labor force in most middle and low income countries.
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    Designing and Implementing Unemployment Benefit Systems in Middle and Low Income Countries : Key Choices between Insurance and Savings Accounts
    (World Bank, Washington, DC, 2013-05) Robalino, David A. ; Weber, Michael
    Several middle income countries are considering reforms of severance pay regulations to both increase flexibility for firms and better protect workers. Policy discussions then often revolve around whether to adopt an unemployment insurance (UI) scheme or unemployment individual savings accounts (UISAs). Proponents of the first emphasize its ability to pool risks and introduce an element of solidarity. Critics point to its potentially negative effects on labor supply as individuals can have fewer incentives to seek, take or keep jobs. In this paper, the authors show that UI and UISAs are, in fact, particular cases of a more general design and that the crucial policy choice is in terms of how redistribution - to cover benefits for those who cannot save enough is financed. The authors outline key features of this general design and discuss trade-offs and possible solutions. The authors discusses issues related to implementation and show how recent technological developments around biometric identification can facilitate the monitoring of conditionalities related to participation in job-search and training activities.
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    Allocating Subsidies for Private Investments to Maximize Jobs Impacts
    (World Bank, Washington, DC, 2020-06) Robalino, David ; Romero, Jose Manuel ; Walker, Ian
    This paper develops a general framework to allocate subsidies to private investments in the presence of jobs-linked externalities (JLEs). JLEs emerge when wages exceed the opportunity cost of labor (labor externalities), or when there are social gains from creating better jobs for some classes of worker, such as women or youth (social externalities). Like all externalities, JLEs create a gap between private and social rates of return. Investments can be socially profitable (once the corresponding JLEs are internalized) but the private returns may be too low for the firm to go ahead. JLEs help to explain why many developing countries see insufficient investment in projects that would reallocate labor towards better jobs. The concept of JLEs is well established in economic literature, but there is a need for better operational approaches to address them. Like other externalities, JLEs can be corrected using a variety of possible subsidies (such as: grants, subsidized infrastructure, credit, training, technical assistance and tax exemptions). But doing this efficiently and at scale this requires mechanisms to (a) estimate the value of the externality and (b) discover the amount of subsidy needed to trigger the private investment. This paper shows that the optimal way to allocate subsidies to offset JLEs is through a competitive bidding process which selects projects based on the estimated amount of JLEs per dollar of subsidy. The bidding process provides an incentive to investors to reveal the subsidy needed for a project to become privately viable. The authors show that the proposed approach maximizes the jobs impacts of a given amount of fiscal resources that has been allotted to support better jobs outcomes.
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    Migration and Jobs: Issues for the 21st Century
    (World Bank, Washington, DC, 2019-05) Christiaensen, Luc ; Gonzalez, Alvaro ; Robalino, David
    With an estimated 724 million extreme poor people living in developing countries, and the world's demographics bifurcating into an older North and a younger South, there are substantial economic incentives and benefits for people to migrate. There are also important market and regulatory failures that constrain mobility and reduce the net benefits of migration. This paper reviews the recent literature and proposes a conceptual framework for better integration and coordination of policies that can address the different market and regulatory failures. The paper advances five types of interventions in need of particular attention in design, implementation, and evaluation; namely, (1) active labor market programs that serve local, regional, and foreign markets; (2) remittances and investment subsidies to promote job creation and labor productivity growth; (3) social insurance programs that cover all jobs and facilitate labor mobility; (4) labor taxes to internalize the social costs of migration in receiving regions; and (5) more flexible private sector driven schemes to regulate the flow of migrants and minimize irregular migration.
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    Labor Policy to Promote Good Jobs in Tunisia : Revisiting Labor Regulation, Social Security, and Active Labor Market Programs
    (Washington, DC: World Bank, 2015) Angel-Urdinola, Diego F. ; Nucifora, Antonio ; Robalino, David ; Angel-Urdinola, Diego F. ; Nucifora, Antonio ; Robalino, David
    Tunisians are striving for the opportunity to realize their potential and aspirations in a country that is rich in both human and physical capital, but whose recent economic growth has failed to create enough opportunities in the form of good and productive jobs. This report highlights the main barriers that hinder the Tunisian labor market from providing income, protection, and prosperity to its citizens and proposes a set of labor policies that could facilitate the creation of better, more inclusive, and more productive jobs. The weak economic performance and insufficient and low-quality job creation in Tunisia is primarily the result of an economic environment permeated by distortions, barriers to competition, and excessive red tape, including in the labor market. This has resulted in the creation of a insufficient number of jobs, especially in the formal sector. To change this situation, policy makers need to address five strategic directives that can promote long-term inclusive growth and formality: foster competition; realign incentives, pay, and benefit packages in the public sector; move toward labor regulations that promote labor mobility and provide support to workers in periods of transition; enhance the productivity of informal workers through training and skills building; and reform existing social insurance systems and introduce new instruments to attain broader coverage.