Poverty and Equity Global Practice of the World Bank
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Labor economics, Poverty, Inequality, Migration
Poverty and Equity Global Practice of the World Bank
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Last updated January 31, 2023
Hernan Winkler is a Senior Economist in the Poverty and Equity Global Practice. He specializes in labor economics, migration, and the sources and consequences of inequality and poverty. His research has been published in peer-reviewed journals including the Review of Economics and Statistics, the Journal of Development Economics and the Journal of Human Resources. He has led several World Bank reports including Reaping Digital Dividends: Leveraging the Internet for Development in Europe and Central Asia. Before joining the World Bank, he was a Researcher at CEDLAS. He holds a PhD in economics from the University of California at Los Angeles (UCLA).
Publication Search Results
Now showing 1 - 10 of 16
Publication(World Bank, Washington, DC, 2012-11) Inchauste, Gabriela ; Azevedo, João Pedro ; Olivieri, Sergio ; Saavedra, Jaime ; Winkler, HernanImprovement in labor market conditions has been the main explanation behind many of the poverty success stories observed in the last decade, that is the primary conclusion of an analysis of changes in poverty by income source. Changes in labor earnings were the largest contributor to poverty reduction for a sample of 16 countries where poverty increased substantially. In 10 of these countries, labor income explained more than half of the change in poverty, and in another 4 countries, it accounted for more than 40 percent of the reduction in poverty. A declining dependency rate accounts for over a fifth of the reduction in poverty in 10 out of 16 countries, while transfers and other non-earned incomes account for more than a quarter of the reduction in poverty in 9 of these countries. A further decomposition of the contribution of labor income to poverty reduction in Bangladesh, Peru, and Thailand found that changes in individual characteristics (education, work experience, and region of residence) were important, but that overall, increases in real earnings among the poor matter the most.
Publication(World Bank, Washington, DC, 2012-07) Inchauste, Gabriela ; Winkler, HernanThis paper quantifies the contributions to distributional changes observed in Pakistan over the last decade. In contrast to methods that focus on aggregate summary statistics, the method adopted in this paper generates entire counterfactual distributions to account for the contributions of demographics, labor and non-labor incomes in explaining poverty reduction. The results show that the most important contributor was the growth in income. Moreover, this growth in income seems to be driven by returns to individual and household endowments, pointing to productivity increases as the driving force behind poverty reduction. Lower dependency ratios, transfers and remittances also contributed to poverty reduction, albeit to a smaller extent. Growth in productivity, particularly between 2001-02 and 2005-06 is consistent with estimates from aggregate accounts, which points to productivity growth led by movements of labor force away from agriculture and into industry and services. If the objective is to reach similar or accelerated poverty reduction and productivity growth going forward, increased investment in rural areas will be needed.
Publication(World Bank, Washington, DC, 2012-10) Inchauste, Gabriela ; Olivieri, Sergio ; Saavedra, Jamie ; Winkler, HernanThis paper quantifies the contributions of different factors to poverty reduction observed in Bangladesh, Peru and Thailand over the last decade. In contrast to methods that focus on aggregate summary statistics, the method adopted here generates entire counterfactual distributions to account for the contributions of demographics and income from labor and non-labor sources in explaining poverty reduction. The authors find that the most important contributor was the growth in labor income, mostly in the form of farm income in Bangladesh and Thailand and non-farm income in the case of Peru. This growth in labor incomes was driven by higher returns to individual and household endowments, pointing to increases in productivity and real wages as the driving force behind poverty declines. Lower dependency ratios also helped to reduce poverty, particularly in Bangladesh. Non-labor income contributed as well, albeit to a smaller extent, in the form of international remittances in the case of Bangladesh and through public and private transfers in Peru and Thailand. Transfers are more important in explaining the reduction in extreme compared with moderate poverty.
Publication(World Bank, Washington, DC, 2014-06) Enamorado, Ted ; López-Calva, Luis-Felipe ; Rodriguez Castelan, Carlos ; Winkler, HernánThe relationship between income inequality and crime has attracted the interest of many researchers, but little convincing evidence exists on the causal effect of inequality on crime in developing countries. This paper estimates this effect in a unique context: Mexico's Drug War. The analysis takes advantage of a unique data set containing inequality and crime statistics for more than 2,000 Mexican municipalities covering a period of 20 years. Using an instrumental variable for inequality that tackles problems of reverse causality and omitted variable bias, this paper finds that an increment of one point in the Gini coefficient translates into an increase of more than 10 drug-related homicides per 100,000 inhabitants between 2006 and 2010. There are no significant effects before 2005. The fact that the effect was found during Mexico's Drug War and not before is likely because the cost of crime decreased with the proliferation of gangs (facilitating access to knowledge and logistics, lowering the marginal cost of criminal behavior), which, combined with rising inequality, increased the expected net benefit from criminal acts after 2005.
Publication(World Bank Group, Washington, DC, 2014-08-12) Inchauste, Gabriela ; Azevedo, João Pedro ; Essama-Nssah, B. ; Olivieri, Sergio ; Van Nguyen, Trang ; Saavedra-Chanduvi, Jaime ; Winkler, HernanUnderstanding Changes in Poverty brings together different methods to decompose the contributions to poverty reduction. A simple approach quantifies the contribution of changes in demographics, employment, earnings, public transfers, and remittances to poverty reduction. A more complex approach quantifies the contributions to poverty reduction from changes in individual and household characteristics, including changes in the sectoral, occupational, and educational structure of the workforce, as well as changes in the returns to individual and household characteristics. Understanding Changes in Poverty implements these approaches and finds that labor income growth that is, growth in income per worker rather than an increase in the number of employed workers was the largest contributor to moderate poverty reduction in 21 countries experiencing substantial reductions in poverty over the past decade. Changes in demographics, public transfers, and remittances helped, but made relatively smaller contributions to poverty reduction. Further decompositions in three countries find that labor income grew mainly because of higher returns to human capital endowments, signaling increases in productivity, higher relative price of labor, or both. Understanding Changes in Poverty will be of particular relevance to development practitioners interested in better understanding distributional changes over time. The methods and tools presented in this book can also be applied to better understand changes in inequality or any other distributional change.
Publication(World Bank, Washington, DC, 2013-04) Azevedo, Joao Pedro ; Inchauste, Gabriela ; Olivieri, Sergio ; Saavedra, Jaime ; Winkler, HernanDemographics, labor income, public transfers, or remittances: Which factor contributes the most to observed reductions in poverty? Using counterfactual simulations, this paper accounts for the contribution labor income has made to the observed changes in poverty over the past decade for a set of 16 countries that have experienced substantial declines in poverty. In contrast to methods that focus on aggregate summary statistics, the analysis generates entire counterfactual distributions that allow assessing the contributions of different factors to observed distributional changes. Decompositions across all possible paths are calculated so the estimates are not subject to path-dependence. The analysis shows that for most countries in the sample, labor income is the most important contributor to changes in poverty. In ten of the countries, labor income explains more than half of the change in moderate poverty; in another four, it accounts for more than 40 percent of the reduction in poverty. Although public and private transfers were relatively more important in explaining the reduction in extreme poverty, more and better-paying jobs were the key factors behind poverty reduction over the past decade.
Publication(Washington, DC: World Bank, 2021-05) Winkler, Hernan ; Montenegro, MiriamBy many measures, the Dominican Republic experienced a stellar economic performance since the early 2000s. Upon closer inspection, however, progress has been slower than the aggregate indicators suggest. The fact that economic growth did not fully translate into higher job quality may help explain why the country’s poverty indicators only declined at the same average pace as other countries in Latin America and the Caribbean, even though its per capita gross domestic product (GDP) grew almost twice as fast as the regional average. This Jobs Diagnostic argues that the main labor market challenge facing the Dominican Republic is how to increase the quality of jobs in a sustained manner. Meeting this challenge is important both for achieving greater poverty reduction and shared prosperity in the medium term, as well as for rendering jobs less vulnerable to the risks posed by longer-term automation and globalization trends. This report presents new findings on the main bottlenecks that are hindering the creation of better jobs in the Dominican Republic and outlines the elements of a jobs strategy that can help remove them.
Publication(World Bank, Washington, DC, 2019-01-31) Lo Bello, Salvatore ; Sanchez Puerta, Maria Laura ; Winkler, HernanThere is a growing body of literature exploring the skill content ofjobs. This article contributes to this research by using data on thetask content of occupations from developing countries, instead of US data as most existing studies do. It finds that US-based indexes do not provide a fair approximation of the levels, changes and drivers of the routine cognitive and non-routine manual skill content of jobs in developing countries. The authors also uncover three new stylized facts. First, while developed countries tend to have jobsmore intensive in non-routine cognitive skills than developing ones, income (both in growth and levels) is not associated with the skill content of jobs once other factors are accounted for. Second,while ICT adoption is linked to job de-routinization, international trade is an off setting force. Last, ICT adoption is correlated with lower employment growth in countries with a high share of occupations intensive in routine tasks.
Publication(Taylor and Francis, 2016-12-09) Winkler, HernanThis article provides new evidence on the impact of the internet on migration decisions. I find that an increase in internet adoption among migrant-sending countries reduces the stock of migrants from these locations. The results are robust to a number of specifications, including an instrumental variable approach that addresses the endogeneity of internet adoption. The findings suggest that the internet may weaken the importance of push factors in the decision to migrate, and that these effects outweigh declines in mobility costs.
Publication(World Bank, Washington, DC, 2018-11) Bussolo, Maurizio ; Torre, Ivan ; Winkler, Hernan ; Torre, IvánEarnings inequality and job polarization have increased significantly in several countries since the early 1990s. Using data from European countries covering a 20-year period, this paper provides new evidence that the decline of middle-skilled occupations and the simultaneous increase of high- and low-skilled occupations are important factors accounting for the rise of inequality, especially at the bottom of the distribution. Job polarization accounts for a large share of the increasing inequality between the 10th and the 50th percentiles, but it explains little or none of the increasing inequality between the 50th and 90th percentiles. Other important developments during this period, such as changing wage returns, higher educational attainment, and increased female labor force participation, account for a small portion of the changes in inequality.