Verme, Paolo

Global Practice on Poverty and Inequality
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Welfare, Poverty, Inequality, Labor markets, Refugees, Middle East, North Africa, former Soviet Union
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Global Practice on Poverty and Inequality
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Last updated January 31, 2023
Paolo Verme is Lead Economist at the World Bank. A Ph.D. graduate of the London School of Economics, he was Visiting Professor at Bocconi University in Milan (2004-2009) and at the University of Turin (2003-2010) before joining the World Bank in 2010. For almost two decades, he served as senior advisor and project manager for multilateral organizations, private companies and governments in the areas of labor market, welfare and social protection policies. His research is widely published in international journals, books and reports. His most recent book is on the welfare of Syrian refugees, a joint study between the World Bank and the UNHCR.
Citations 52 Scopus

Publication Search Results

Now showing 1 - 6 of 6
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    The Welfare of Syrian Refugees: Evidence from Jordan and Lebanon
    (Washington, DC: World Bank, 2016) Verme, Paolo ; Gigliarano, Chiara ; Wieser, Christina ; Hedlund, Kerren ; Petzoldt, Marc ; Santacroce, Marco
    The book focuses on the largest refugee crisis of our time: the Syrian refugee crisis. It exploits a wealth of survey and registry data on Syrian refugees living in Jordan and Lebanon to assess their poverty and vulnerability status, understand the predictors of these statuses, evaluate the performance of existing policies toward refugees, and determine the potential for alternative policies. Findings point to a complex situation. In the absence of humanitarian assistance, poverty is extremely high among refugees. Current policies including cash transfers and food vouchers are effective in reducing poverty but they remain short of providing economic inclusion and self-reliance of refugees. A shift toward economic inclusion and self-reliance would require a different humanitarian and development paradigm, one that focuses on growth policies for areas affected by refugees where the target population is constituted by refugees and hosting populations alike. This joint study by the World Bank Group and the United Nations High Commissioner for Refugees helps bridge the historical divide between humanitarian and development work by providing practical solutions for assisting refugees in the short, medium and long-term and to prevent the irreversible loss of social and human capital typically associated with prolonged refugee crises.
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    Risk Preferences and the Decision to Flee Conflict
    (World Bank, Washington, DC, 2018-03) Ceriani, Lidia ; Verme, Paolo
    Despite the growing numbers of forcibly displaced persons worldwide, many people living under conflict choose not to flee. Individuals face two lotteries -- staying or leaving -- characterized by two distributions of potential outcomes. This paper proposes to model the choice between these two lotteries using quantile maximization as opposed to expected utility theory. The paper posits that risk-averse individuals aim at minimizing losses by choosing the lottery with the best outcome at the lower end of the distribution, whereas risk-tolerant individuals aim at maximizing gains by choosing the lottery with the best outcome at the higher end of the distribution. Using a rich set of household and conflict panel data from Nigeria, the paper finds that risk-tolerant individuals have a significant preference for staying and risk-averse individuals have a significant preference for fleeing, in line with the predictions of the quantile maximization model. These findings are contrary to findings on economic migrants, and call for separate policies toward economic and forced migrants.
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    The Economics of Forced Displacement: An Introduction
    (World Bank, Washington, DC, 2017-04) Verme, Paolo
    Forced displacement -- defined as the displacement of refugees and internally displaced persons due to violence -- has reached an unprecedented scale and global attention during the past few years, particularly in the aftermath of the Syrian refugee crisis in 2011 and the European Union's migration crisis in 2015. As this plight gained momentum, economics found itself unprepared to answer the basic questions surrounding refugees and internally displaced persons. Few economists or institutions were working on forced displacement. Economic theory or empirics had little to offer in articles published in journals. Data were scarce, unreliable, or inaccessible. Can economics rise to the challenge? Is the economics of forced displacement different from neoclassical economics? Can off-the-shelves models be used to study forced displaced populations? What is missing to do the economics of forced displacement? What are the data constraints that limit economists in this work? This paper provides a first nontechnical introduction to these topics. The paper argues that the modeling of utility, choice, risk, and information in a short-term setting is the key to address the problem. Neoclassical economics lacks some of the theoretical ingredients that are needed, but recent developments in game theory, neuroeconomics, and behavioral economics have opened new horizons that make the task of modeling forced displacement within reach. Empirics is clearly limited by the scarcity of quality data, but an example shows how welfare economists can start working with existing data. Economists have no excuse to maintain the status quo and should get on with the work on forced displacement.
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    Optimal Targeting under Budget Constraints in a Humanitarian Context
    (World Bank, Washington, DC, 2017-09) Gigliarano, Chiara ; Verme, Paolo
    The combination of conflict, food insecurity, and displacement generates competing claims for financial resources that stretch the donors' ability to provide funding and the humanitarian organizations' capacity to provide social assistance. The paper uses Receiver Operating Characteristic curves and related indexes to determine the optimal targeting strategy of a food voucher program for refugees. The estimations focus on the 2014 food vouchers administered by the World Food Programme to Syrian refugees in Jordan. The analysis uses data collected by the United Nations High Commissioner for Refugees. Based on a poverty model, Receiver Operating Characteristic curves are used to optimize coverage and leakage rates under budget constraints. The paper shows how policy makers can use these instruments to fine-tune targeting using coverage rates, budgets, or poverty lines as guiding principles to increase the overall efficiency of a program. As humanitarian organizations operate under increasing budget constraints and increasing demands for efficiency, the proposed approach addresses both concerns.
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    The Impact of Forced Displacement on Host Communities: A Review of the Empirical Literature in Economics
    (World Bank, Washington, DC, 2019-02) Verme, Paolo ; Schuettler, Kirsten
    The paper reviews 49 empirical studies that estimate the impact of forced displacement on host communities. A review of the empirical models used by these studies and a meta-analysis of 762 separate results collected from them are the main contributions of the paper. Coverage extends to 17 major forced displacement crises that occurred between 1922 and 2015, to host countries at different levels of economic development and different types of forced migrants. The focus is on outcomes related to household well-being, prices, employment, and wages. All studies can be classified as ex post quasi-natural experiments. The analysis on empirical modeling shows a preference for partial equilibrium modeling, differences-in-differences evaluation methods, and cross-section econometrics, with all these choices largely dependent on the type of data available. The meta-analysis on household well-being shows that between 45 and 52 percent of the results are positive and significant, indicating a net improvement in household well-being. An additional 34 to 42 percent of the results are found to be nonsignificant, and 6 to 20 percent show a decrease in household well-being. The analyses on employment and wages show positive and significant improvements for 12 to 20 percent of the results, nonsignificant results in 63 percent of the cases, and negative and significant results for 22 to 25 percent of the results. Negative results on employment and wages relate to young and informal workers in middle-income countries. The results on prices show asymmetric behavior across types of products. Overall, the probability of having a negative outcome for host communities in the consumer and labor markets is below 20 percent.
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    Do Refugees with Better Mental Health Better Integrate?: Evidence from the Building a New Life in Australia Longitudinal Survey
    (World Bank, Washington, DC, 2022-06) Dang, Hai-Anh H. ; Trinh, Trong-Anh ; Verme, Paolo
    Hardly any evidence exists on the effects of mental illness on refugee labor outcomes. This paper offers the first study on this topic in the context of Australia, one of the host countries with the largest number of refugees per capita in the world. Analyzing the Building a New Life in Australia longitudinal survey, the paper exploits the variations in traumatic experiences of refugees interacted with post-resettlement time periods to causally identify the impacts of refugee mental health. The findings show that worse mental health, as measured by a one-standard-deviation increase in the Kessler mental health score, reduces the probability of employment by 14.1 percent and labor income by 26.8 percent. There is also evidence of adverse impacts of refugees’ mental illness on their children’s mental health and educational performance. These effects appear to be more pronounced for newly arriving refugees and those without social networks, but they may be ameliorated with government support.