Lokshin, Michael M.

Person:
Lokshin, Michael M.

Office of the Chief Economist, Europe and Central Asia Region, The World Bank

Fields of Specialization

Social safety nets, Child health, Poverty mapping, Inequality, Poverty analysis, Labor

Departments

Office of the Chief Economist, Europe and Central Asia Region, The World Bank

Last updated: February 19, 2025

Biography

Michael Lokshin is Lead Economist with the Office of the Chief Economist for Europe and Central Asia, at the World Bank. Prior to that, Michael was a Lead Economist and Manager in the Development Data Group of the World Bank. He received his Ph.D. in Economics from University of North Carolina at Chapel Hill in 1999 after which he joined the research group at the World Bank as a Young Economist (YE program). His research focuses on the areas of poverty and inequality measurement, labor economics, and applied econometrics. More recently he has been involved in the Bank's efforts to develop the methodology of evaluating the effect of crisis and public policies on households in developing countries. He also leads the group of researchers in development of the Software Platform for Automated Economic Analysis (ADePT).

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Publication Search Results

Now showing 1 - 10 of 71

Greater Heights: Growing to High Income in Europe and Central Asia
(Washington, DC: World Bank, 2025-03-12) Iacovone, Leonardo; Izvorski, Ivailo; Kostopoulos, Christos; Lokshin, Michael M.; Record, Richard; Torre, Iván; Doczi, Szilvia
Twenty-seven countries have reached high-income status since 1990. Ten of these are in the Europe and Central Asia region and have joined the European Union. Another 20 in the region have become more prosperous since the 1990s. However, their transition to high-income status has been delayed. These middle-income countries have found that the prospects for growth to high-income status have become even more difficult since the 2007–09 global financial crisis. This reflects partly a slowdown in structural reforms at home and partly the challenges associated with a deterioration in the global environment. The concern has emerged that many countries in the region may be caught in the middle-income trap, a phase in development characterized by a recurring deceleration in growth and by per capita incomes that are systematically below the high-income threshold. To ensure that these countries overcome the obstacles to growth and achieve progress toward high-income status, policy makers need to make the transition from a strategy driven largely by investment to a strategy that is supported by the importation and diffusion of global capital, knowledge, and technology and then to a strategy that complements these with innovation. The report Greater Heights: Growing to High Income in Europe and Central Asia relies on the 3i strategy described in World Development Report 2024—investment, infusion, and innovation—to propose policy options to assist middle-income countries in Europe and Central Asia in the effort to reach high-income status. Drawing on comprehensive empirical analysis, the report offers actionable recommendations that will enable policy makers to advance stronger economic growth across the region. Such a transition will require continued and sustained foundational reform to maximize the drivers of economic growth while pivoting to new transformative reforms to promote the development of more complex economic structures and institutions. These involve the need to discipline incumbents, boost the role of the private sector, strengthen the competitive environment, and reward merit. The emphasis on a strategy driven by innovation is also critically important for those countries that have already attained high-income status.
Europe and Central Asia Economic Update, Fall 2024: Better Education for Stronger Growth
(Washington, DC: World Bank, 2024-10-17) Izvorski, Ivailo; Kasyanenko, Sergiy; Lokshin, Michael M.; Torre, Iván
Economic growth in Europe and Central Asia (ECA) is likely to moderate from 3.5 percent in 2023 to 3.3 percent this year. This is significantly weaker than the 4.1 percent average growth in 2000-19. Growth this year is driven by expansionary fiscal policies and strong private consumption. External demand is less favorable because of weak economic expansion in major trading partners, like the European Union. Growth is likely to slow further in 2025, mostly because of the easing of expansion in the Russian Federation and Turkiye. This Europe and Central Asia Economic Update calls for a major overhaul of education systems across the region, particularly higher education, to unleash the talent needed to reinvigorate growth and boost convergence with high-income countries. Universities in the region suffer from poor management, outdated curricula, and inadequate funding and infrastructure. A mismatch between graduates' skills and the skills employers are seeking leads to wasted potential and contributes to the region's brain drain. Reversing the decline in the quality of education will require prioritizing improvements in teacher training, updated curricula, and investment in educational infrastructure. In higher education, reforms are needed to consolidate university systems, integrate them with research centers, and provide reskilling opportunities for adult workers.
Does Social Mobility Affect Economic Development?: Cross-Country Analysis Using Different Mobility Measures
(Washington, DC: World Bank, 2025-02-05) Torre, Iván; Lokshin, Michael M.; Foster, James
This paper analyzes the relationship between intergenerational educational mobility and long-term growth across the world using different mobility measures, comparing absolute mobility indicators with relative mobility indicators. The analysis is carried out across a panel of 68 countries over 2000–20. The results indicate that upward mobility in higher education is positively associated with gross domestic product per capita in Europe and Central Asia, but relative mobility indicators are uncorrelated with country income. In Latin America, higher relative mobility is associated with lower income, and higher absolute mobility is associated with higher income. The remaining regions of the world show a mix of these patterns.
Growing Vulnerability: What Happened to Europe’s Middle Class in the Course of a Decade ?
(Washington, DC: World Bank, 2025-01-28) Bussolo, Maurizio; Karver, Jonathan; Lokshin, Michael M.; López-Calva, Luis-Felipe; Torre, Iván
This paper uses a vulnerability-based approach to analyze the evolution of the middle class in Europe between 2005–08 and 2015–18. The analysis reveals that, on average, the income level needed to ensure a low probability of falling into poverty—also understood as the vulnerability threshold—increased between those periods in real terms. This increase correlates with decreases in the size of the middle class in many European countries. In parallel, the composition of the middle class changed, with an increased share of tertiary-educated household heads and a larger share of household heads with managerial and professional occupations. Lastly, the households that were not poor, but not yet middle class, were further from becoming middle class in the second period than in the first period.
Migrants as Social Protection?: Simulations of a Market for Work Permits
(Washington, DC: World Bank, 2025-01-08) Do, Quy-Toan; Lokshin, Michael M.; Ravallion, Martin
Workers have the right to take up any job offer in their country of citizenship but not to rent out that right. This paper shows that relaxing this restriction using a two-sided competitive market in work permits can provide a basic income guarantee for workers in migration-destination countries, financed by selling temporary work permits to migrant workers. Regulating the market by imposing a tax on work permits narrows the set of beneficiaries, the income of which can further be complemented with the revenues from such tax. Substantial gains in the destination countries’ gross domestic product can be expected, alongside the first-order gains to migrant workers who would not otherwise have access to the labor markets in destination countries. The paper provides a quantitative illustration by simulating a fictitious market for work permits between Mexico and the United States.
Do More Informed Citizens Make Better Climate Policy Decisions?
(Washington, DC: World Bank, 2024-09-24) Lokshin, Michael M.; Torre, Ivan; Hannon, Michael; Purroy, Miguel #.
This study explores the relationship between perceptions of catastrophic events and beliefs about climate change. Using data from the 2023 Life in Transition Survey, the study finds that contrary to conventional wisdom, more accurate knowledge about past catastrophes is associated with lower concern about climate change. The paper proposes that heightened threat sensitivity may underlie both the tendency to overestimate disaster impacts and increased concern about climate change. The findings challenge the assumption that a more informed citizenry necessarily leads to better climate policy decisions. Instead, they suggest that psychological factors, like anxiety and risk perception, play crucial roles in shaping climate attitudes. Illuminating these dynamics can help societies to foster a more nuanced and constructive public dialogue about the urgent challenges facing our planet and our species.
Why Did Support for Climate Policies Decline in Europe and Central Asia?
(Washington, DC: World Bank, 2024-09-23) Cojocaru, Alexandru; Lokshin, Michael M.; Torre, Ivan
This paper investigates trends in willingness to pay higher taxes to combat climate change in countries of Eastern and Central Europe and Central Asia between 2016 and 2023. Using data from the Life in Transition Survey, it shows that despite increasing attention from policy makers, scientists, and the media, the average shares of respondents willing to pay to combat climate change declined over this period. The paper tests several hypotheses that could explain the deterioration of public readiness to support climate change policies. The most likely explanation is the growing politicization of the climate change agenda in the region.
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) Roseman Norfleet, Julia Renee; Izvorski, Ivailo; Lokshin, Michael M.; 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.
Electoral Cycles and Public Spending during the Pandemic
(World Bank, Washington, DC, 2022-10) Rodriguez Ferrari, Aylen; Lokshin, Michael; 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.
Explaining the Evolution of Job Tenure in Europe, 1995–2020
(World Bank, Washington, DC, 2022-10) Capelle, Damien; Bussolo, Maurizio; 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.