Person:
Messina, Julián

Latin America and Caribbean

Fields of Specialization

Private Sector Development, Social Development, Trade

Departments

Latin America and Caribbean

Last updated January 31, 2023

Biography

Julian Messina es economista senior en la oficina del economista en jefe del Banco Mundial para América Latina y el Caribe. Antes de unirse al Banco, trabajó como economista en el departamento de investigación del Banco Central Europeo entre 2001 y 2005, y fue profesor asociado en la Universidad de Girona, de 2005 a 2009. Su trabajo se ha publicado en revistas académicas como el Journal of Economic Perspectives, el Economic Journal, Journal of the European Economic Association, European Economic Review and Labour Economics. Tiene un PhD de la Universidad Europea, en 2002.

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Now showing 1 - 10 of 19

The Incidence of Nominal and Real Wage Rigidity : An Individual-Based Sectoral Approach

( 2010) Messina, Julian ; Du Caju, Philip ; Duarte, Claudia Filipa ; Hansen, Niels Lynggard ; Izquierdo, Mario

This paper presents estimates based on individual data of downward nominal and real wage rigidities for 13 sectors in Belgium, Denmark, Spain, and Portugal. Our methodology follows the approach recently developed for the International Wage Flexibility Project, whereby resistance to nominal and real wage cuts is measured through departures of observed individual wage change histograms from an estimated counterfactual wage change distribution that would have prevailed in the absence of rigidity. Our estimates of wage rigidities are set against structural features of the labour markets studied, including the wage bargaining level and the degree of product market competition.
Latin American Entrepreneurs : Many Firms but Little Innovation

(Washington, DC: World Bank, 2014-01-02) Lederman, Daniel ; Messina, Julián ; Pienknagura, Samuel ; Rigolini, Jamele

Entrepreneurship is a fundamental driver of growth, development, and job creation. While Latin America and the Caribbean has a wealth of entrepreneurs, firms in the region, compared to those in other regions, are small in size and less likely to grow or innovate. Productivity growth has remained lackluster for decades, including during the recent commodity boom. Enhancing the creation of good jobs and accelerating productivity growth in the region will require dynamic entrepreneurs. Latin American Entrepreneurs: Many Firms but Little Innovation studies the landscape of entrepreneurship in Latin America and the Caribbean. Utilizing new datasets that cover issues such as firm creation, firm dynamics, export decisions, and the behavior of multinational corporations, the book synthesizes the results of a comprehensive analysis of the status, prospects, and challenges of entrepreneurship in the region. Useful tools and information are provided to help policy makers and practitioners identify policy areas governments can explore to enhance innovation and encourage high-growth, transformational entrepreneurship.
Wage Rigidity and Disinflation in Emerging Countries

(American Economic Association, 2014-01) Messina, Julián ; Sanz-de-Galdeano, Anna

This paper examines the consequences of rapid disinflation for downward wage rigidities in two emerging countries, Brazil and Uruguay. Although wage rigidities are altered by disinflation, in neither of the two countries does price stability eliminate frictions in wage-setting mechanisms. In a context of individual wage negotiations and weak unions, disinflation in Uruguay puts an end to its history of indexation, but strong resistance to nominal wage cuts emerges. In strongly unionized Brazil, wage indexation is highly persistent, but the introduction of inflation targeting by the Central Bank in 1999 moves the focal point of wage negotiations to expected inflation.
The Labor Market Story Behind Latin America's Transformation: LAC Semiannual Report, October 2012

(Washington, DC, 2012-10) de la Torre, Augusto ; Messina, Julian ; Pienknagura, Samuel

After a robust recovery following the global crisis, Latin American and the Caribbean (LAC) has entered into a phase of lower growth dynamics: economic activity in the region is expected to expand by about 3 percent in 2012, after having grown at 4 percent in 2011 and 6 percent in 2010. This deceleration is not specific to LAC but is part of a global slowdown. World growth is indeed declining sharply, from 4.5 percent in 2011 to about 2.3 percent in 2012. Notably, the slowdown in middle-income regions has taken place in a highly synchronized manner: growth rates in LAC, Eastern Europe and South East Asia have fallen by a very similar magnitude (about 3 percentage points) between 2010 and 2012. While this synchronization reflects exogenous (global) forces the spillover to emerging markets of weaker activity in the world's growth poles, particularly Europe and China it also reflects endogenous (internal) dynamics, particularly the fact that many Middle Income Countries (MIC) had already reached in 2010-2011 the peak of their own business cycles. This synchronicity notwithstanding, the 2012 growth forecasts for individual countries in LAC are significantly heterogeneous, reflecting complex interactions between external and country-specific factors. The first chapter, which is shorter, concerns the economic juncture and growth prospects. The second chapter, which is longer and more substantive, deals with selected labor issues from both the structural and cyclical viewpoints.
Economic Mobility and the Rise of the Latin American Middle Class

(Washington, DC: World Bank, 2013) Ferreira, Francisco H.G. ; Messina, Julian ; Rigolini, Jamele ; López-Calva, Luis-Felipe ; Lugo, Maria Ana ; Vakis, Renos

After decades of stagnation, the size of Latin America's middle class recently expanded to the point where, for the first time ever, the number of people in poverty is equal to the size of the middle class. This volume investigates the nature, determinants and possible consequences of this remarkable process of social transformation. We propose an original definition of the middle class, tailor-made for Latin America, centered on the concept of economic security and thus a low probability of falling into poverty. Given our definition of the middle class, there are four, not three, classes in Latin America. Sandwiched between the poor and the middle class there lies a large group of people who appear to make ends meet well enough, but do not enjoy the economic security that would be required for membership of the middle class. We call this group the 'vulnerable'. In an almost mechanical sense, these transformations in Latin America reflect both economic growth and declining inequality in over the period. We adopt a measure of mobility that decomposes the 'gainers' and 'losers' in society by social class of each household. The continent has experienced a large amount of churning over the last 15 years, at least 43% of all Latin Americans changed social classes between the mid 1990s and the end of the 2000s. Despite the upward mobility trend, intergenerational mobility, a better proxy for inequality of opportunity, remains stagnant. Educational achievement and attainment remain to be strongly dependent upon parental education levels. Despite the recent growth in pro-poor programs, the middle class has benefited disproportionally from social security transfers and are increasingly opting out from government services. Central to the region's prospects of continued progress will be its ability to harness the new middle class into a new, more inclusive social contract, where the better-off pay their fair share of taxes, and demand improved public services.
Evolving Wage Cyclicality in Latin America

(World Bank Group, Washington, DC, 2014-07) Messina, Julian ; Gambetti, Luca

A vector autoregression model with time-varying coefficients is used to examine the evolution of wage cyclicality in four Latin American economies: Brazil, Chile, Colombia and Mexico, during the period 1980-2010. Wages are highly pro-cyclical in all countries up to the mid-1990s except in Chile. Wage cyclicality declines thereafter, especially in Brazil and Colombia. This decline in wage cyclicality is in accordance with declining real-wage flexibility in a low-inflation environment. Controlling for compositional effects caused by changes in labor force participation along the business cycle does not alter these results.
Why Firms Avoid Cutting Wages : Survey Evidence from European Firms

(World Bank Group, Washington, DC, 2014-07) Du Caju, Philip ; Kosma, Theodora ; Lawless, Martina ; Messina, Julian ; Room, Tairi

Firms very rarely cut nominal wages, even in the face of considerable negative economic shocks. This paper uses a unique survey of fourteen European countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why the firms avoid cutting wages. The paper examines how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations put forward for the infrequency of wage cuts. Concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types. Restrictions created by collective bargaining were found to be an important consideration for firms in Western European (EU-15) countries but were one of the lowest ranked obstacles in the new EU member states in Central and Eastern Europe.
Downward Nominal and Real Wage Rigidity : Survey Evidence from European Firms

(World Bank, Washington, DC, 2009-12) Babecky, Jan ; Du Caju, Philip ; Kosma, Theodora ; Lawless, Martina ; Messina, Julian ; Room, Tairi

It has been well established that the wages of individual workers react little, especially downwards, to shocks that hit their employer. This paper presents new evidence from a unique survey of firms across Europe on the prevalence of downward wage rigidity in both real and nominal terms. The authors analyse which firm-level and institutional factors are associated with wage rigidity. The results indicate that it is related to workforce composition at the establishment level in a manner that is consistent with related theoretical models (e.g. efficiency wage theory, insider-outsider theory). The analysis also finds that wage rigidity depends on the labour market institutional environment. Collective bargaining coverage is positively related with downward real wage rigidity, measured on the basis of wage indexation. Downward nominal wage rigidity is positively associated with the extent of permanent contracts and this effect is stronger in countries with stricter employment protection regulations.
The Margins of Labor Cost Adjustment : Survey Evidence from European Firms

(World Bank, Washington, DC, 2009-12) Babecky, Jan ; Du Caju, Philip ; Kosma, Theodora ; Lawless, Martina ; Messina, Julian ; Room, Tairi

Firms have multiple options at the time of adjusting their wage bills. However, previous literature has mainly focused on base wages. This paper broadens the analysis beyond downward rigidity in base wages by investigating the use of other margins of labor cost adjustment at the firm level. Using data from a unique survey, the authors find that firms make frequent use of other, more flexible, components of compensation to adjust the cost of labor. Changes in bonuses and non-pay benefits are some of the potential margins firms use to reduce costs. The paper also shows how the margins of adjustment chosen are affected by firm and worker characteristics.
The Fall of Wage Flexibility: Labor Markets and Business Cycles in Latin America and the Caribbean since the 1990s

(World Bank, Washington, DC, 2011-09-15) Lederman, D. ; Maloney, W.F. ; Messina, J.

This study explores how labor markets have adjusted to temporary business cycle fluctuations since (at least) the 1990s. It focuses on how changes in macroeconomic conditions affect the evolving nature of labor-market adjustments on the other hand. The study pays particular attention to the role of low inflation and international trade in shaping labor-market adjustment. The main focus of the report is on employment, wages and informality. The report analyzes how they are affected by business cycles, and on how low inflation and the nature of external shocks affects labor market dynamics. It is organized as follows. Chapter 1 provides an overview of the cyclical macroeconomic behavior of wages in four LAC countries. Importantly, rather than examining the average cyclical pattern of wages, it focuses on the time varying patterns in the relationship between wages, employment and output. The second part of Chapter 2 studies downward wage rigidities with sectoral data. Chapter 3 moves from wages to quantitative labor-market adjustments and attempts to the answer what limits the expansion of formal employment in LAC? The chapter studies differences, similarities and linkages between formal and informal employment over the business cycle to understand the frustrating persistence of informal employment in the region. Chapter 4 takes a close look at the adjustment of formal labor markets in Northern Mexico during the United States recession of 2008-09. Chapter 5 turns our attention to the distributional costs of recessions by examining how returns to schooling fluctuate with the business cycle, and how they respond to different types of economic shocks. Chapter 6 concludes with a brief summary of the findings and some thoughts about policy implications.