Poverty and Equity Global Practice
Author Name Variants
Fields of Specialization
Labor economics, Poverty and distributional analysis, Gender, Public policy, Inequality and Shared Prosperity, Jobs and Development
Poverty and Equity Global Practice
Externally Hosted Work
Last updated January 31, 2023
Carolina Sánchez-Páramo, a Spanish national, is currently the Senior Director of the Poverty and Equity Global Practice (GP) at the World Bank. Prior to this assignment, she was the Poverty and Equity GP Practice Manager in the Europe and Central Asia region. Carolina has worked on operations, policy advice and analytical activities in Eastern Europe, Latin America and South Asia, and was part of the core team working on the WDR2012, “Gender Equality and Development”. Her main areas of interest and expertise include labor economics, poverty and distributional analysis, gender equality and welfare impacts of public policy. She has led reports on poverty and equity, labor markets and economic growth in several countries, as well as social sector operations. She has published articles in refereed journals and edited books on the topics described above. Carolina has a PhD in Economics from Harvard University.
Publication Search Results
Now showing 1 - 10 of 18
Publication(World Bank, Washington, DC, 2002-01) Sanchez-Paramo, CarolinaThe author studies the potential disincentive effects of unemployment insurance, and social assistance payments on the duration of unemployment in the Slovak Republic. For this purpose, she uses new, very detailed data on receipt of benefits from the Unemployment Registry (1990-2000) and the Labor Force Survey (1996, 1999, and 2000). She employs a flexible methodology that makes it possible to identify behavioral changes that may occur as the quantity, and duration of the benefits change over time, as well as behavioral differences between recipients, and non-recipients. This approach, she argues, constitutes a more accurate test for the presence of incentive, and disincentive effects, than those presented before in the literature. She expands the scope of her analysis, to study the effect of receiving benefits on several outcomes in addition to exit from unemployment (for example, job seeking behavior, and duration of unemployment). She finds important behavioral differences between those who receive benefits, and those who do not. Recipients tend to spend more time unemployed, but they also look for employment more actively than their counterparts, have more demanding preferences with respected to their future jobs, and find jobs in the private sector more often. In addition, these jobs turn out to be better matches than those obtained by non-recipients (with the quality of the match measured by its duration). Moreover, the behavior of recipients varies tremendously depending on whether they are actually receiving benefits, or not. Once their benefits are exhausted, they exit the Unemployment Registry at a higher rate, search more actively, and move into private sector jobs more often. So when these workers are used as their own control group, there is strong evidence that both unemployment insurance and social assistance, or support have important disincentive effects, not only on the duration of unemployment, but also on job seeking behavior, and on exit to employment. Analyzing the effect of unemployment insurance, and social assistance on poverty, the author concludes that these programs bear most of the burden in the fight against poverty. But this protection does not come free, since significant disincentive effects are associated with receiving benefits. Thus any reform plan should take into account both of these aspects of the programs, along with the government's goals for the programs.
Publication(Washington, DC: World Bank, 2003) De Ferranti, David ; Perry, Guillermo E. ; Gill, Indermit ; Guasch, J. Luis ; Maloney, William F. ; Sanchez-Paramo, Carolina ; Schady, NorbertThis report focuses not only on the gaps facing Latin America in both education and technology, but especially on the interactions between the two. The central premise of the report is that skills and technology interact in important ways, and this relationship is a fundamental reason for the large observed differences in productivity and incomes across countries. This report argues that skills upgrading technological change, and their interaction are major factors behind total factor productivity growth. Skill-biased technological change is indeed being transferred today at faster speeds to LAC countries, as elsewhere. Technological change has been complementary with skill levels in Latin America in the last two decades. It is further estimated that firms have substantially increased the demand for educated workers in the region, particularly workers with tertiary education. This technological transformation appears to be intimately related to patterns of integration in the world economy. Firms in sectors with higher exposure to trade are subject to more competitive pressures. Adopting and adapting more advanced technologies and hiring and training more educated workers is one way to respond to this pressure to become more productive. The increased potential demand for education offers the possibility to accelerate productivity growth in the economy by closing the educational and technological gaps that Latin American countries exhibit with respect to their peers.
Does Eurosclerosis Matter? Institutional Reform and Labor Market Performance in Central and Eastern Europe(Washington, DC: World Bank, 2002) Riboud, Michelle ; Sánchez-Páramo, Carolina ; Silva-Jáuregui, CarlosThis paper examines the labor market dynamics of six CEE countries over the last 10 years, paying special attention to the nature of labor market institutions these countries have adopted and their impact on labor market performance. This paper finds that, compared to EU countries, CEE countries fall in the "middle" of the flexibility scale regarding their employment protection legislation. While the effect of labor market institutions is hard to uncover, it should not be disregarded and they are likely to play an important role in the coming years.
Publication(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.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.
Publication(World Bank, Washington, DC, 2003-02) Das, Jishnu ; Sánchez-Páramo, CarolinaIndia spends 6 percent of its GDP on health-three times the amount spent by Indonesia and twice that of China-and spending on non-chronic morbidities is three times that of chronic illnesses. It is normally assumed that the high spending on non-chronic illnesses reflects the prevalence of morbidities with high case-fatality or case-disability ratios. But there is little data that can be used to separate out spending by type of illness. The authors address this issue with a unique dataset where 1,621 individuals in Delhi were observed for 16 weeks through detailed weekly interviews on morbidity and health-seeking behavior. The authors' findings are surprising and contrary to the normal view of health spending. They define a new class of illnesses as "short duration morbidities" if they are classified as non-chronic in the international classification of disease and are medically expected to last less than two weeks. The authors show that short duration morbidities are important in terms of prevalence, practitioner visits, and household health expenditure: Individuals report a short duration morbidity in one out of every five weeks. Moreover, one out of every three weeks reported with a short duration morbidity results in a doctor visit, and each week sick with such a morbidity increases health expenditure by 25 percent. Further, the absolute spending on short duration morbidities is similar across poor and rich income households. The authors discuss the implications of these findings in understanding household health behavior in an urban context, with special emphasis on the role of information in health-seeking behavior.
Publication(World Bank, Washington, DC, 2003-04) Sanchez-Paramo, Carolina ; Schady, NorbertThe authors describe the evolution of relative wages in five Latin American countries-Argentina, Brazil, Chile, Colombia, and Mexico. They use repeated cross-sections of household surveys, and decompose the evolution of relative wages into factors associated with changes in relative supply and relative demand. The authors have three main conclusions: 1) Increases in the relative wages of the most skilled (university-educated) workers took place concurrently with increases in their relative abundance in all of the countries except Brazil. This is strong evidence of increases in the demand for skilled workers. 2) Increases in the wage bill of skilled workers occurred largely within sectors, and in the same sectors in different countries, which is consistent with skill-biased technological change. 3) Trade appears to be an important transmission mechanism. Increases in the demand for the most skilled workers took place at a time when countries in Latin America considerably increased the penetration of imports, including imports of capital goods. The authors show that changes in the volume and research and development intensity of imports are significantly related to changes in the demand for more skilled workers in Latin America. Their research complements earlier work on the effects of technology transmitted through trade on productivity and on the demand for skilled labor.
Publication(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, LucasThis 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.
The Impact of the Financial Crisis on Poverty and Income Distribution : Insights from Simulations in Selected Countries(World Bank, Washington, DC, 2010-03) Habib, Bilal ; Narayan, Ambar ; Olivieri, Sergio ; Sanchez, CarolinaAs the financial crisis has spread through the world, the lack of real-time data has made it difficult to track its impact in developing countries. The authors use a micro-simulation approach to assess the poverty and distributional effects of the crisis. In Bangladesh, Mexico, and the Philippines, the authors find increases in both the level and the depth of aggregate poverty. Income shocks are relatively large in the middle (and, in Mexico, the bottom) parts of the income distribution. The authors also find that characteristics of people who become poor because of the crisis are different from those of both chronically poor people and the general population. Findings will be useful for policy makers wishing to identify leading monitoring indicators to track the impact of macroeconomic shocks and to design policies that protect vulnerable groups.
Publication(World Bank, Washington, DC, 2005-05) Sanchez-Paramo, CarolinaThe note looks at poverty in Ecuador, assessing macroeconomic developments through its policies to maintain stability with fiscal discipline, and increase economic productivity and competitiveness, in particular, the 1998/99 crisis, the 2000 dollarization and their effect on poverty. From 1990 to 2001, national consumption-based poverty rose from 40 to 45 percent, and the number of poor people increased from 3.5 to 5.2 million. Poverty increased by over 80 percent in urban areas at the Costa and the Sierra, was stable in the rural Costa, and rose 15 percent in the rural Sierra. Poverty rates continued to be highest in rural areas, but rapid urbanization increased the number of poor people living in urban areas. Employment is the main income source, frequently the only one, for most urban families. Thus policies that generate employment and wage income are crucial for reducing urban poverty. The 1998/99 crisis sent employment and real labor income plummeting, urban poverty rose, and poor urban households resorted to various coping strategies, such as increased labor force participation, and migration. Poverty declined slowly after 2000, reflecting just a weak formal employment creation. It is stipulated social expenditures could be used more effectively, for significant improvements are needed in education provision, and quality, especially in rural areas, while health service coverage must be expanded and integrated better across different subsystems, and providers.
Publication(World Bank, Washington, DC, 2002-05) Gill, Indermit S. ; Maloney, William F. ; Sanchez-Paramo, CarolinaThis note synthesizes the findings of research on trade and labor in the region, including World Bank studies on: (i) trade and job quality, (ii) informality, and (iii) labor policies in the region. First, the evidence on the relationship between trade liberalization, macro-restructuring and labor market outcomes during the 1990s is reviewed. Second, labor market rigidities will be analyzed and the extent to which reform efforts facilitated formal employment creation. Finally, based on lessons learned from the 1990s, a new agenda for labor market reform is proposed which reflects more closely the new environment in which Latin American governments now operate.