Torre, Iván

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Labor economics, Inequality, Poverty, Political economy
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Last updated May 25, 2023
Iván Torre is a Senior Economist in the Office of the Chief Economist, Europe and Central Asia Region of the World Bank. His work focuses on inequality, labor economics, human development, and political economy. Prior to joining the World Bank, he worked as a consultant for the Inter-American Development Bank. He has a bachelor’s degree in economics from Universidad de Buenos Aires and holds a Ph.D. in economics from Sciences Po, Paris.

Publication Search Results

Now showing 1 - 10 of 15
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    Is Social Protection a Luxury Good?
    (World Bank, Washington, DC, 2022-09) Lokshin, Michael ; Ravallion, Martin ; Torre, Iván
    The claim that social protection is a luxury good—with a national income elasticity exceeding unity—has been influential. The paper tests the “luxury good hypothesis” using newly-assembled data on social protection spending across countries since 1995, treating the pandemic period separately, as it entailed a large expansion in social protection efforts. While the mean income share devoted to social protection rises with income, this is attributable to multiple confounders, including relative prices, weak governance in low-income countries and access to information-communication technologies. Controlling for these, social protection is not a luxury good. This was also true during the pandemic.
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    Explaining the Evolution of Job Tenure in Europe, 1995–2020
    (World Bank, Washington, DC, 2022-10) Bussolo, Maurizio ; Capelle, Damien ; Lokshin, Michael M. ; Torre, Iván ; Winkler, Hernan
    During the last quarter century, job tenure in Europe has shortened. Using data from Eurostat Labor Force Surveys of 29 countries from 1995 to 2020 and applying an age-period-cohort decomposition to analyze changes in tenure for specific birth cohorts, this paper shows that tenure has shrunk for cohorts born in more recent years. To account for compositional changes within cohorts, the analysis estimates the probability of holding jobs of different durations, conditional on individual and employment-related characteristics. The estimations demonstrate that, over time, the likelihood of having a medium- or long-term job decreased and holding a short-term job increased. The paper also finds that stricter job protection legislation appears to decrease the probability of holding a short-term job, and higher trade openness and ICT-related technological change are correlated with an increase of that probability.
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    Management Capabilities and Performance of Firms in the Russian Federation
    (World Bank, Washington, DC, 2019-09) Grover Goswami, Arti ; Torre, Ivan ; Torre, Iván
    Using the management and operational practices survey in the Russian Federation, this paper finds that an average Russian manufacturing firm adopts 43 percent of the structured management practices (a score of 0.43), a value that is far from the frontier (for example, the United States scores 0.62). This average mask the wide heterogeneity in practices, where a large share of firms adopt few structured management practices and only 3.5 percent of them have a score over 0.75. Consistent with the findings in other countries, better managed firms in Russia show stronger firm performance, measured as gross revenue per employee, value added per employee, total factor productivity, and employment growth. Improving the management score from the 10th to the 90th percentile is associated with an increase in sales per worker by 87 percent, value added per worker by 30 percent, and total factor productivity by 13.5 percent. What drives better management capabilities? Russian firms are similar to those in other countries, such that exporters and firms with foreign linkages are better managed. Switching from operating purely in the domestic market to being globally linked is associated with a significant increase in management capabilities. However, unlike the results in other countries, management capabilities in Russia are not associated with firm age, implying that firms do not learn to be better managed over their life cycle. This result points to the possibility of inefficient allocation of resources, such that learning and selection mechanism does not weed out the badly managed firms, perhaps due to the lack of pro-competitive forces.
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    I Perceive Therefore I Demand: The Formation of Inequality Perceptions and Demand for Redistribution
    (World Bank, Washington, DC, 2019-06) Bussolo, Maurizio ; Ferrer-i-Carbonell, Ada ; Giolbas, Anna ; Torre, Ivan ; Torre, Iván
    This paper investigates the link between inequality and demand for redistribution by looking at how individuals form their perceptions of inequality. Most of the literature analyzing demand for redistribution has focused on objective inequality, rather than subjective perceptions of inequality. However, a model that links demand for redistribution to subjective inequality is needed, given that recent empirical research has shown a growing gap between subjective and objective inequality. Using data from the International Social Survey Programme survey, the paper focuses on explaining individuals' formation of inequality perceptions using objective variables. The paper then studies the relationship between these perceptions and individuals' demand for redistribution. The analysis finds that objective macro variables are associated with individuals' perceptions of inequality, and that individual circumstances, some of which relate to self-interest, like age, educational attainment, and income, also play an important role. Perceptions of equality, in turn, are significatively correlated to demand for redistribution and seem to substitute for any effect of objective variables. This result suggests that contextual macro variables only affect individuals' demand for redistribution through their perceptions of equality and do not have a direct effect.
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    Electoral Cycles and Public Spending during the Pandemic
    (World Bank, Washington, DC, 2022-10) Lokshin, Michael ; Rodriguez Ferrari, Aylen ; Torre, Iván
    This paper uses a newly assembled data set on various types of social protection spending in 154 countries during the COVID-19 pandemic in 2020 and 2021 to analyze the effect of the electoral cycle on the size and composition of the social protection stimulus budget. The analysis shows that the longer is the time since the last election in a country—and thus the sooner the next election date—the larger is the share of the social protection pandemic budget allocated to social assistance and income protection and the lower is the share allocated to job retention schemes. The electoral cycle appears to have impacted the size of social assistance spending only in countries with high political competition. In this sense, countries with higher political competition experience stronger effects of political budget cycles.
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    Measuring Human Capital in Middle Income Countries
    (Elsevier, 2022-12) Demirgüç-Kunt, Asli ; Torre, Iván
    This paper develops an indicator that measures the level of human capital to address the specific education and health challenges faced by middle income countries. We apply this indicator to countries in Europe and Central Asia, where productive employment requires skills that are more prevalent among higher education graduates, and where good health is associated to low levels of adult health risk factors. The Europe and Central Asia Human Capital Index (ECA-HCI) extends the World Bank's Human Capital Index by adding a measure of quality-adjusted years of higher education to the original education component, and it includes the prevalence of three adult health risk factors—obesity, smoking, and heavy drinking—as an additional proxy for latent health status. The results show that children born today in the average country in Europe and Central Asia will be almost half as productive as they would have had they reached the benchmark of complete education and full health. Countries with good basic education outcomes do not necessarily have good higher education outcomes, and high prevalence of adult health risk factors can offset good education indicators. This extension of the Human Capital Index could also be useful for assessing the state of human capital in middle-income countries in general.
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    Europe and Central Asia Economic Update, Spring 2023: Weak Growth, High Inflation, and a Cost-of-Living Crisis
    (Washington, DC : World Bank, 2023-04-06) Izvorski, Ivailo ; Lokshin, Michael M. ; Roseman Norfleet, Julia Renee ; Singer, Dorothe ; Torre, Iván
    Economic growth slowed sharply last year in Europe and Central Asia, as Russia's invasion of Ukraine, a surge in inflation, and the sharp tightening of monetary policy and financing conditions hit private consumption, investment, and trade. The marked increase in food and energy prices boosted inflation to a pace not seen in 20 years. The burden of inflation was spread unevenly across households. The poorest households faced inflation that was more than 2 percentage points higher than the inflation faced by the richest households, with this difference exceeding 5 percentage points in some countries. Poverty and inequality rates derived from household-specific inflation rates differ from those based on the standard consumer price index (CPI) approach. These differences have important policy implications, because many programs use CPI–based inflation adjustments, which do not accurately capture changes in the cost of living of targeted populations. Output growth in the region is projected to remain little changed in 2023 but better than projected in January 2023, largely reflecting upgrades to the pace of expansion in Poland, Russia, and Türkiye.
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    Does Job Polarization Explain the Rise in Earnings Inequality? Evidence from Europe
    (World Bank, Washington, DC, 2018-11) Bussolo, Maurizio ; Torre, Ivan ; Winkler, Hernan ; Torre, Iván
    Earnings 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.
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    Vertical and Horizontal Redistribution: The Cases of Western and Eastern Europe
    (World Bank, Washington, DC, 2018-11) Bussolo, Maurizio ; Krolage, Carla ; Makovec, Mattia ; Peichl, Andreas ; Stockli, Marc ; Torre, Ivan ; Wittneben, Christian ; Torre, Iván
    European countries have the world's most redistributive tax and transfer systems. Although they have been well equipped to deal with vertical inequality -- that is, fostering redistribution from the rich to the poor -- less is known about their performance in dealing with horizontal inequality, that is, in redistributing among socioeconomic groups. In a context where individuals may not only care about vertical redistribution, but also about the economic situation of the specific groups to which they belong, the horizontal dimension of redistribution becomes politically salient and can be a source of social tensions. This paper analyzes the performance of the 28 EU countries on redistribution across (i) age groups, (ii) occupational groups, and (iii) household types over 2007–2014 using counterfactual simulation techniques. The analysis finds a great degree of heterogeneity across countries: changes in the tax and transfer system have particularly hit the young and losers of occupational change in Eastern European countries, while households with greater economic security have benefited from these changes. The findings suggest that horizontal inequality is a dimension that policy makers should take into account when reforming tax and transfer systems.
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    Protect Incomes or Protect Jobs? The Role of Social Policies in Post-Pandemic Recovery
    (World Bank, Washington, DC, 2022-09) Demirgüç-Kunt, Asli ; Lokshin, Michael ; Torre, Iván
    This paper examines the effectiveness of income protection and job protection policies for the post-pandemic economic recovery of the second half of 2020 through 2021. The paper is based on a new data set of the budgets of social protection programs implemented as a part of the pandemic stimulus package in 154 countries. The empirical analysis shows that, in the short run, higher expenditure on job protection measures is associated with more robust gross domestic product growth, increased employment, and decreased inactivity and poverty rates compared to the expansion of income protection programs. Both policies had a significant economic impact only in countries with weaker pre-pandemic social insurance systems. In countries with broader coverage of the social insurance system, the income and job protection programs appear to have had a limited impact on post-pandemic recovery. Because the structural economic changes induced by the pandemic are expected to materialize fully in several years, more research is needed to understand the longer-term effects of job protection and income protection policies on labor markets and economic recovery.