Person:
Arias, Omar

Last updated: May 19, 2025

Biography

Omar Arias is currently the Deputy Chief Economist in the World Bank East Asia and Pacific region. Previously, he was the Manager and Lead Economist for Global Knowledge and Innovation for Education, Practice Lead Economist of the Social Protection and Labor Global Practice and Global Lead for skills, Sector Manager and Lead Economist in the Human Development Economics Unit for the Europe and Central Asia region; Sector Leader of Human Development for Bolivia, Chile, Ecuador, Peru, and Venezuela; Senior Economist in the Poverty Group of the Latin American region; and Research Economist at the Inter-American Development Bank. In his publications, he has been a co-author of various flagship policy research studies, including regional studies on skills (The Skills Balancing Act in Sub-Saharan Africa), pensions (The Inverting Pyramid: Pension Systems Facing Demographic Challenges in Europe and Central Asia), jobs (Back to Work: Growing with Jobs in Europe and Central Asia); labor markets, poverty and inequality (Informality: Exit and Exclusion and Poverty Reduction and Growth: Virtuous and Vicious Circles); as well as numerous country studies on skills, informality and labor markets including in Argentina, Bolivia, China, Dominican Republic, El Salvador, Peru, Poland, and Romania. He has peer-reviewed publications in various topics, including estimation of returns to schooling and skills, socio-emotional skills, labor market dynamics, determinants of income mobility, growth, poverty and inequality, human capital accumulation, tax evasion, and in applied econometrics. He was a Fulbright scholar at the University of Illinois at Urbana-Champaign, where he obtained his master's degree and doctorate in economics.

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Future Jobs: Robots, Artificial Intelligence, and Digital Platforms in East Asia and Pacific
(Washington, DC: World Bank, 2025-05-19) Arias, Omar; Fukuzawa, Daisuke; Le, Duong Trung; Mattoo, Aaditya
People in East Asia and Pacific (EAP) countries have prospered over the last few decades because of the growth in productive jobs. Do industrial robots, artificial intelligence (AI), and digital platforms threaten that development model? "Future Jobs" presents evidence that new technologies have thus far boosted employment. Increases in productivity and scale have outweighed the labor-displacing effects of automation technologies. However, the benefits have been uneven, favoring skilled workers while some less-skilled workers, in more routine and manual jobs, have been pushed into the informal sector. Digital platforms have generated new opportunities for the hitherto marginalized but also created insecurity for incumbent workers. Looking ahead, digitization will enhance the tradability of services, and AI will transform the production processes. EAP countries can benefit by equipping their workforce with the necessary skills and opening their long-protected services sectors to trade and investment. Policy makers, researchers, and businesses will find in this book both insights and questions on how best to harness the potential of new technologies to sustain prosperity in EAP countries.
The Skills Balancing Act in Sub-Saharan Africa: Investing in Skills for Productivity, Inclusivity, and Adaptability
(Washington, DC: World Bank and Agence française de développement, 2019-06-10) Arias, Omar; Evans, David K.; Santos, Indhira; Arias, Omar
Sub-Saharan Africa has the youngest population of any region of the world, and that growing working-age population represents a major opportunity to reduce poverty and increase shared prosperity. But the region’s workforce is the least skilled in the world, constraining economic prospects. Despite economic growth, declining poverty, and investments in skills-building, too many students in too many countries in Sub-Saharan Africa are not acquiring the foundational skills they need to thrive and prosper in an increasingly competitive global economy. This report examines the balancing act that individuals and countries face in making productive investments in both a wide range of skills – cognitive, socio-emotional, and technical – and a wide range of groups – young children through working adults – so that Sub-Saharan Africa will thrive.
Can Grit Be Taught? Lessons from a Nationwide Field Experiment with Middle-School Students
(World Bank, Washington, DC, 2021-11) Petroska-Beska, Violeta; Santos, Indhira; Carneiro, Pedro; Eskreis-Winkler, Lauren; Munoz Boudet, Ana Maria; Berniell, Ines; Krekel, Christian; Arias, Omar; Duckworth, Angela; Arias, Omar
This paper studies whether a particular socio-emotional skill —grit (the ability to sustain effort and interest toward long-term goals)—can be cultivated and how this affects student learning. The paper implements, as a randomized controlled trial, a nationwide low-cost intervention designed to foster grit and self-regulation among sixth and seventh grade students in primary schools in North Macedonia (about 33,000 students across 350 schools). Students exposed to the intervention report improvements in self-regulation, in particular the perseverance-of-effort facet of grit, relative to students in a control condition. The impacts on students are larger when both students and teachers are exposed to the curriculum than when only students are treated. Among disadvantaged students, the study also finds positive impacts on grade point averages, with gains of up to 28 percent of a standard deviation one year post-treatment. However, the findings also point toward a potential downside: although the intervention made students more perseverant and industrious, there is some evidence that it may have reduced consistency in their interests over time.
Back to Work : Growing with Jobs in Europe and Central Asia
(Washington, DC: World Bank, 2014-01-15) Arias, Omar S.; Sánchez-Páramo, Carolina; Dávalos, María E.; Santos, Indhira; Tiongson, Erwin R.; Gruen, Carola; de Andrade Falcão, Natasha; Saiovici, Gady; Cancho, Cesar A.; Arias, Omar
Creating more and better jobs is arguably the most critical challenge to boosting shared prosperity in ECA. This report answers two questions: How can the countries create more jobs? Should there be specific policies to help workers access those jobs?. In answering them, the report examines the role of reforms, firms, skills, incentives and barriers to work, and labor mobility through the lens of two contextual factors: the legacy of centralized planned economies and the mounting demographic pressures associated with rapid aging in some countries and soaring numbers of youth entering the workforce in others. The main findings of the report are: i) market reforms pay off in terms of jobs and productivity, although with a lag; ii) a small fraction of superstar high-growth firms, largely young, account for most of new jobs created in the region- thus, countries, especially late reformers, need to unleash the potential of high levels of latent entrepreneurship to start-up new firms; iii) skills gaps hinder employment prospects, especially of youth and older workers, due to the inadequate response of the education and training system to changes in the demand for skills; iv) employment is hindered by high implicit taxes on work for those transitioning to work from inactivity or unemployment and barriers that affect especially women, minorities, youth and older workers; and, v) low internal labor mobility prevents labor relocation to places with greater job creation potential. The report argues that to get more people back to work by growing with jobs, countries need to regain the momentum for economic and institutional reforms that existed before the crisis in order to: (i) lay the fundamentals to create jobs for all workers, by pushing reforms to create the enabling environment for existing firms to grow, become more productive, or exit the market and tap on entrepreneurship potential for new firms to emerge and succeed or fail fast and cheap; and (ii) implement policies to support workers so they are prepared to take on the new jobs being created, by having the right skills, incentives and access to work, and being ready to move to places with the highest job creation potential.
Informality : Exit and Exclusion
(Washington, DC: World Bank, 2007) Perry, Guillermo E.; Maloney, William F.; Arias, Omar S.; Fajnzylber, Pablo; Mason, Andrew D.; Saavedra-Chanduvi, Jaime; Arias, Omar
Informality: exit and exclusion analyzes informality in Latin America, exploring root causes and reasons for and implications of its growth. The authors use two distinct but complementary lenses: informality driven by exclusion from state benefits or the circuits of the modern economy, and driven by voluntary 'exit' decisions resulting from private cost-benefit calculations that lead workers and firms to opt out of formal institutions. They find both lenses have considerable explanatory power to understand the causes and consequences of informality in the region. Informality: exit and exclusion concludes that reducing informality levels and overcoming the 'culture of informality' will require actions to increase aggregate productivity in the economy, reform poorly designed regulations and social policies, and increase the legitimacy of the state by improving the quality and fairness of state institutions and policies. Although the study focuses on Latin America, its analysis, approach, and conclusions are relevant for all developing countries.
The Inverting Pyramid : Pension Systems Facing Demographic Challenges in Europe and Central Asia
(Washington, DC: World Bank, 2014-02-12) Schwarz, Anita M.; Arias, Omar S.; Zviniene, Asta; Rudolph, Heinz P.; Eckardt, Sebastian; Koettl, Johannes; Immervoll, Herwig; Abels, Miglena; Arias, Omar
Pension systems in Europe and Central Asia are facing unprecedented demographic change. While many of the countries in the region have undertaken reforms when the economy faces difficult times, these reforms are frequently reversed when the economy improves. The demographic challenges that the region faces require a sustained effort toward changing the pension system toward something which provides adequate and sustainable benefits. The book documents the increased generosity of pension systems in Europe from their initial inception, noting that the current expectations of the public are based on the most recent round of generosity. The book seeks to show a nontechnical audience that such generosity is neither based on customary practice nor affordable in the future. The increased generosity in the past was only possible because the demographic pyramid was expanding, but as it inverts with fewer young people and more elderly, that generosity will no longer be affordable. Returning to the pension system of the 1970’s will go a long way toward providing adequate and sustainable benefits in the future. Moving to a more sustainable system will require reforms to labor markets, improvements in savings mechanisms, and may require additional public resources. The extent to which a country can undertake reforms in labor markets, savings, and public finances can influence the extent to which its pension system will have to change, with different solutions possible for different countries. But in all cases, the changes that need to be made have to be widely discussed and publicly accepted to prevent reversals. The book hopes to stimulate widespread public discussion of the issue to help countries make sustainable choices with gradual implementation, before they face such daunting challenges that they have to undertake sudden, harsh measures.
Poverty Reduction and Growth : Virtuous and Vicious Circles
(2006) Perry, Guillermo E.; Arias, Omar S.; López, J. Humberto; Maloney, William F.; Servén, Luis; Arias, Omar
Poverty Reduction and Growth is about the existence of these vicious circles in Latin America and the Caribbean about the ways and means to convert them into virtuous circles in which poverty reduction and high growth reinforce each other. This publication is organized as follows: Chapter 1: From vicious to virtuous circle; Chapter 2: Dimensions of well-being, channels to growth; Chapter 3: How did we get here? Chapter 4: The relative roles of growth and inequality for poverty reduction; Chapter 5: Pro-poor growth in Latin America; Chapter 6: Does poverty matter for growth? Chapter 7: Subnational dimensions of growth and poverty; Chapter 8: Microdeterminants of incomes: labor markets, poverty, and traps?; and Chapter 9: Breaking the cycle of underinvestment in human capital in Latin America.
Bolivia Poverty Assessment : Establishing the Basis for Pro-Poor Growth
(World Bank, Washington, DC, 2006-05) Arias, Omar S.; Bendini, Magdalena; Arias, Omar
This brief discussion of Bolivia's poverty assessment notes that Bolivia's growth prospects remain vulnerable to domestic instability and external circumstances. Because of the depth and breadth of poverty in Bolivia, and the skewed income distribution, high GDP per capita growth rates about 4 to 5 percent per year are necessary in the medium and longer term, if the country's poverty level is to be significantly reduced. The national MDG target of reducing the incidence of extreme poverty in half by 2015 could be achieved with growth rates in this range, along with other pro-poor policy interventions. Even higher per capita growth is needed to meet the MDG of reducing poverty in half. Economic simulations indicate that the country can improve its future growth potential through a comprehensive strategy of mutually-reinforcing reforms that includes macroeconomic stability.
Pending Issues in Protection, Productivity Growth, and Poverty Reduction
(World Bank, Washington, DC, 2005-12) Arias, Omar; Blom, Andreas; Bosch, Mariano; Cunningham, Wendy; Fiszbein, Ariel; Lopez Acevedo, Gladys; Maloney, William; Saavedra, Jaime; Sanchez-Paramo, Carolina; Santamaria, Mauricio; Siga, Lucas; Arias, Omar
This paper selectively synthesizes much of the research on Latin American and Caribbean labor markets in recent years. Several themes emerge that are particularly relevant to ongoing policy dialogues. First, labor legislation matters, but markets may be less segmented than previously thought. The impetus to voluntary informality, which appears to be a substantial fraction of the sector, implies that the design of social safety nets and labor legislation needs to take a more integrated view of the labor market, taking into account the cost-benefit analysis workers and firms make about whether to interact with formal institutions. Second, the impact of labor market institutions on productivity growth has probably been underemphasized. Draconian firing restrictions increase litigation and uncertainty surrounding worker separations, reduce turnover and job creation, and poorly protect workers. But theory and anecdotal evidence also suggest that they, and other related state or union induced rigidities, may have an even greater disincentive effect on technological adoption, which accounts for half of economic growth. Finally, institutions can affect poverty and equity, although the effects seem generally small and channels are not always clear. Overall, the present constellation of labor regulations serves workers and firms poorly and both could benefit from substantial reform.
Sources of Income Persistence: Evidence from Rural El Salvador
(2011) Sosa-Escudero, Walter; Marchionni, Mariana; Arias, Omar; Arias, Omar
This article uses a unique panel data set of rural El Salvador to investigate the main sources of persistence and variability in incomes. Our econometric framework validly reduces a general panel model to a dynamic linear model with a covariance structure that can be estimated efficiently with short panels. We find that life-cycle incomes are largely explained by the productive characteristics of families, such as education and access to public goods, and unobserved heterogeneity. Pure state dependence, arising from income shocks persistency, is of second order. In El Salvador, frequent transitory shocks are a more important source of income variation than in developed countries.