Person:
Gatti, Roberta

MENA Chief Economist Office

Fields of Specialization

LABOR ECONOMICS, POLITICAL ECONOMY, SOCIAL INCLUSION, ECONOMIC GROWTH

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MENA Chief Economist Office

Last updated May 17, 2023

Biography

Roberta Gatti is the World Bank’s chief economist of the Middle East and North Africa region and former chief economist of the Human Development Practice Group, where she led the SDI and the Human Capital Index initiatives. She joined the World Bank in 1998 as a Young Professional in the Development Research Group. Her research includes theoretical and empirical contributions to labor and household economics, political economy, growth, and social inclusion. She has authored multiple World Bank flagship reports, including Jobs for Shared Prosperity and Being Fair, Faring Better. She has taught at Georgetown University and Johns Hopkins University.

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Now showing 1 - 10 of 34

Jobs for Shared Prosperity : Time for Action in the Middle East and North Africa

(Washington, DC: World Bank, 2013-05) Gatti, Roberta ; Morgandi, Matteo ; Grun, Rebekka ; Brodmann, Stefanie ; Angel-Urdinola, Diego ; Moreno, Juan Manuel ; Marotta, Daniela ; Schiffbauer, Marc ; Mata Lorenzo, Elizabeth

In the aftermath of the Arab Spring, when thousands of young women and men fought for the opportunity to realize their aspirations and potential, the question of jobs continues to be crucial in the Middle East and North Africa region. This report uses jobs as a lens to weave together the complex dynamics of employment creation, skills supply, and the institutional environment of labor markets. Consistent with the framework of the 2013 World Development Report on jobs, of which this report is the regional companion, this work goes beyond the traditional links between jobs, productivity, and living standards to include an understanding of how jobs matter for individual dignity and expectations—an aspect that was clearly central to the Arab Spring. Just as important, this report complements the economic perspective with an analysis of political economy equilibrium, with a view to identifying mechanisms that would trigger a reform process. As such, the report has three objectives: First, it seeks to provide an in-depth characterization of the dynamics of labor markets in the Middle East and North Africa and to analyze the barriers to the creation of more and better jobs. It does so by taking a cross-sectoral approach and identifying the distortions and incentives that the many actors—firms, governments, workers, students, education, and training systems—currently face, and which ultimately determine the equilibrium in labor markets. Second, the report proposes a medium term roadmap of policy options that could promote the robust and inclusive growth needed to tackle the structural employment challenge for the region. Third, the report aims to inform and open up a platform for debate on jobs among a broad set of stakeholders, with the ultimate goal of contributing to reach a shared view of the employment challenges and the reform path ahead.
Child Labor : The Role of Income Variability and Access to Credit in a Cross-Section of Countries

(World Bank, Washington, DC, 2002-01) Dehejia, Rajeev H. ; Gatti, Roberta

Even though access to credit is central to child labor theoretically, little work has been done to assess its importance empirically. Dehejia and Gatti examine the link between access to credit and child labor at a cross-country level. The authors measure child labor as a country aggregate, and proxy credit constraints by the level of financial market development. These two variables display a strong negative (unconditional) relationship. The authors show that even after they control for a wide range of variables-including GDP per capita, urbanization, initial child labor, schooling, fertility, legal institutions, inequality, and openness-this relationship remains strong and statistically significant. Moreover, they find that, in the absence of developed financial markets, households resort to child labor to cope with income variability. This evidence suggests that policies aimed at increasing households' access to credit could be effective in reducing child labor.
Family Altruism and Incentives

(World Bank, Washington, DC, 2000-12) Gatti, Roberta

The author builds on the altruistic model of the family, to explore the strategic interaction between altruistic parents, and selfish children, when children's efforts are endogenous. If there is uncertainty about the amount of income the children will realize, and if parents have imperfect information, the children have an incentive to exert little effort, and to rely on their parent's altruistically motivated transfers. Because of this, parents face a tradeoff between the insurance that bequests implicitly provide their children, and the disincentive to work prompted by their altruism. The author shows that if parents can credibly commit to a pattern of transfers, they will choose not to compensate children in bad outcomes, as much as predicted by the standard (no uncertainty, no asymmetric information) dynastic model of the family. Alternatively, parents may choose to forgo any insurance, and offer a fixed level of bequest, to elicit greater effort from their children. The optimal transfers structure that the author derives, reconciles the predictions of the altruistic family model, with much of the existing evidence on inter-generational transfers, which suggests that parents compensate only partially, or not at all, for earnings differentials among their children. Moreover, the author shows that Ricardian equivalence holds in this setup, except when non-negativity constraints are binding.
Individual Attitudes Toward Corruption : Do Social Effects Matter?

(World Bank, Washington, DC, 2003-08) Gatti, Roberta ; Paternostro, Stefano ; Rigolini, Jamele

Using individual-level data for 35 countries, the authors investigate the microeconomic determinants of attitudes toward corruption. They find women, employed, less wealthy, and older individuals to be more averse to corruption. The authors also provide evidence that social effects play an important role in determining individual attitudes toward corruption, as these are robustly and significantly associated with the average level of tolerance of corruption in the region. This finding lends empirical support to theoretical models where corruption emerges in multiple equilibria and suggests that "big-push" policies might be particularly effective in combating corruption.
Child Labor, Income Shocks, and Access to Credit

(World Bank, Washington, DC, 2003-06) Beegle, Kathleen ; Dehejia, Rajeev H. ; Gatti, Roberta

Although a growing theoretical literature points to credit constraints as an important source of inefficiently high child labor, little work has been done to assess its empirical relevance. Using panel data from Tanzania, the authors find that households respond to transitory income shocks by increasing child labor, but that the extent to which child labor is used as a buffer is lower when households have access to credit. These findings contribute to the empirical literature on the permanent income hypothesis by showing that credit-constrained households actively use child labor to smooth their income. Moreover, they highlight a potentially important determinant of child labor and, as a result, a mechanism that can be used to tackle it.
Decentralization and Corruption : Evidence across Countries

(World Bank, Washington, DC, 2000-02) Fisman, Raymond ; Gatti, Roberta

The relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design. The theoretical literature makes ambiguous predictions about this relationship, and it has remained virtually unexamined by empiricists. The authors make a first attempt at examining the issue empirically, by looking at the cross-country relationship between fiscal decentralization and corruption as measured by a number of different indices. Their estimates suggest that fiscal decentralization in government spending is significantly associated with lower corruption. Moreover, they find that the origin of a country's legal system - for example, civil versus common legal code - performs extremely well as an instrument for decentralization. The estimated relationship between decentralization, when so instrumented, and corruption is even stronger. The evidence suggests a number of interesting areas for future work, including investigating whether there are specific services for which decentralized provision has a particularly strong impact on political rent extraction, and understanding the channels through which decentralization succeeds in keeping corruption in check.
The Consequences of Child Labor : Evidence from Longitudinal Data in Rural Tanzania

(World Bank, Washington, DC, 2008-07) Beegle, Kathleen ; Dehejia, Rajeev H. ; Gatti, Roberta ; Krutikova, Sofya

This paper exploits a unique longitudinal data set from Tanzania to examine the consequences of child labor on education, employment choices, and marital status over a 10-year horizon. Shocks to crop production and rainfall are used as instrumental variables for child labor. For boys, the findings show that a one-standard-deviation (5.7 hour) increase in child labor leads 10 years later to a loss of approximately one year of schooling and to a substantial increase in the likelihood of farming and of marrying at a younger age. Strikingly, there are no significant effects on education for girls, but there is a significant increase in the likelihood of marrying young. The findings also show that crop shocks lead to an increase in agricultural work for boys and instead lead to an increase in chore hours for girls. The results are consistent with education being a lower priority for girls and/or with chores causing less disruption for education than agricultural work. The increased chore hours could also account for the results on marriage for girls.
Why Should We Care About Child Labor? The Education, Labor Market, and Health Consequences of Child Labor

(World Bank, Washington, DC, 2005-01) Beegle, Kathleen ; Dehejia, Rajeev ; Gatti, Roberta

Although there is extensive literature on the determinants of child labor and many initiatives aimed at combating it, there is limited evidence on the consequences of child labor on socioeconomic outcomes such as education, wages, and health. The authors evaluate the causal effect of child labor participation on these outcomes using panel data from Vietnam and an instrumental variables strategy. Five years subsequent to the child labor experience, they find significant negative effects on school participation and educational attainment, but also find substantially higher earnings for those (young) adults who worked as children. The authors find no significant effects on health. Over a longer horizon, they estimate that from age 30 onward the forgone earnings attributable to lost schooling exceed any earnings gain associated with child labor and that the net present discounted value of child labor is positive for discount rates of 11.5 percent or higher. The authors show that child labor is prevalent among households likely to have higher borrowing costs, that are farther from schools, and whose adult members experienced negative returns to their own education. This evidence suggests that reducing child labor will require facilitating access to credit and will also require households to be forward looking.
Does Access to Credit Improve Productivity? Evidence from Bulgarian Firms

(World Bank, Washington, DC, 2006-05) Gatti, Roberta ; Love, Inessa

Although it is widely accepted that financial development is associated with higher growth, the evidence on the channels through which credit affects growth on the micro-level is scant. Using data from a cross section of Bulgarian firms, the authors estimate the impact of access to credit (as proxied by indicators of whether firms have access to a credit or overdraft facility) on productivity. To overcome potential omitted variable bias of OLS estimates, they use information on firms' past growth to instrument for access to credit. The authors find credit to be positively and strongly associated with total factor productivity. These results are robust to a wide range of robustness checks.
Striving for Better Jobs : The Challenge of Informality in the Middle East and North Africa Region

(World Bank, Washington, DC, 2011-12) Gatti, Roberta ; Angel-Urdinola, Diego F. ; Silva, Joana ; Bodor, Andras

This quick note provides an overview of the World Bank report striving for better jobs: the challenge of informality in the Middle East and North Africa (MENA). The report was completed as a revolutionary wave of demonstrations and protests swept across the Arab world. Millions of young people were chanting 'dignity' and 'social justice' in the region, underlining deep-seated feelings of exclusion and inequality of opportunities. Demanding democracy, human rights, and better governance, young Arabs were also striving to realize their economic aspirations in a region rich in human and physical capital. However, while there has been economic growth for a number of years in MENA countries, this has not led to an adequate number of good jobs and has succeeded, at best, in generating low-quality, informal jobs.