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Bussolo, Maurizio

Office of the Chief Economist for Europe and Central Asia

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Income distribution, International trade, Economics of aging, Economics of saving

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Office of the Chief Economist for Europe and Central Asia

Last updated: September 19, 2023

Biography

Maurizio Bussolo, lead economist in the Chief Economist Office for Europe and Central Asia, has been working on quantitative analyses of economic policy and development both in research and operational departments at the World Bank for more than 12 years. He has led operational teams in the aftermath of the 2008-09 crisis negotiating with LAC governments implementation of reforms to shield the most vulnerable. He previously worked at the OECD, at the Overseas Development Institute in London, and at Fedesarrollo and the Los Andes University in Colombia. He has extensively published in peer-reviewed journals on trade, growth, poverty and income distribution, economics of aging, saving and investment. He holds a PhD in economics from the University of Warwick.

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Publication Search Results

Now showing 1 - 10 of 48

Inequality of Opportunity and Investment Choices
(World Bank, Washington, DC, 2023-09-19) Brock, J. Michelle; Bussolo, Maurizio
Inequality of opportunity leads to misallocation of human capital and can affect economies via its impact on individual economic decision making. This paper studies the impact of inequality of opportunity on investment, using a laboratory experiment. The experiment randomized inequality of opportunity, then subjects chose to invest in a risky asset or savings. The results suggest that inequality of opportunity impacts investment choices only for people who are penalized by their circumstances and only once they learn the impact of inequality of opportunity on their relative position in the income distribution. This disadvantaged group invests more often and invests higher shares of their earnings than the control and advantaged groups. The fact that both inequality of opportunity and knowledge of relative position need to be present for the impact on investment to materialize points to the importance of peer effects. More broadly, the paper highlights the relevance of social preferences for understanding the effects of inequality of opportunity on individual decision making.
(Perceptions of) Inequality, Demand for Redistribution, and Group-Specific Public Goods: A Survey Experiment in India
(World Bank, Washington, DC, 2023-07-18) Dixit, Akshay; Bussolo, Maurizio
This paper uses data from a survey of 116,061 households in India to study people’s beliefs about inequality and demand for redistribution. The findings show that a household’s beliefs about inequality, implied by the perception of their position on the income distribution, is negatively correlated with support for reducing inequality. This is relevant since there are significant differences between where individuals believe their household stands and their actual position, with the gap between perceived and actual position exceeding two deciles on average. Despite these large differences, informing individuals of their household’s position on the income distribution has no discernible effect on support for reducing inequality. The paper posits that demand for redistribution may be unresponsive to this information because it is based on exclusively on household’s income and does not account for the sharing of resources within communities. In communities where group-specific public goods, such as religious and social goods, are present, class antagonism and redistribution are mitigated by community solidarity. Households benefit from these goods, and such benefits alter the individuals’ beliefs of inequality. Consistent with this prediction, the average individual perceives their household as richer in districts with a greater supply of religious or social goods. The sharing of resources within religious or ethnic groups can shape perceptions of the income distribution and reduce support for redistribution within these groups, and thus requires serious consideration in studies of inequality.
Explaining the Evolution of Job Tenure in Europe, 1995–2020
(World Bank, Washington, DC, 2022-10) 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.
Job Tenure and Structural Change in the Transition Economies of Europe
(World Bank, Washington, DC, 2022-10) Bussolo, Maurizio; Lokshin, Michael M.; Torre, Iván
This paper uses labor force survey data for 1995–2020 to analyze the dynamics of job tenure in seven transition economies of Europe and a comparator country (Türkiye). The country-specific age-period-cohort decomposition demonstrates that, except in Albania, the job tenure of the cohort of workers entering the labor market in the 2000s is four to nine years shorter than that of workers who started working in the 1970s. This difference is at least twice as large as the difference in job tenure observed among workers from the same cohorts in European Union countries. These trends in tenure persist after accounting for changes in cohort composition, but they are significantly attenuated by controlling for differences in individual worker characteristics. These results suggest that the evolution of tenure in the transition economies of Europe is still driven mainly by the transition-induced structural change processes in the labor market.
Social Norms and Gender Equality: A Descriptive Analysis for South Asia
(World Bank, Washington, DC, 2022-08) Bussolo, Maurizio; Munoz Boudet, Ana Maria; Poupakis, Stavros; Rahman, Tasmia; Sarma, Nayantara
Despite decades of economic growth, gender inequality in South Asia remains remarkably high. Although not the only one, social norms are a crucial driver of various gender outcomes, including differential economic participation. Using repeated cross-sectional data from nationally representative surveys, this paper explores the long term trends of gender outcomes and social norms (proxied by attitudes towards gender roles) in South Asia. The results corroborate the evidence that there has been almost no progress in gender equality in South Asia over the past half-century. There has been little progress on female labor force participation, marriage age, agency, intimate partner violence, and preference for sons, with education being the only exception. The lack of progress is apparent among all socioeconomic groups, including women who live in urban areas, are educated, and have higher incomes. Gender attitudes also remain unchanged, and in some cases, have become more conservative and have a negative relationship with gender outcomes. Better measurements of social norms and better understanding of how their constraining role can be loosened may be critical for achieving gender equality in the region.
Indirect Effects of COVID-19 Nonpharmaceutical Interventions on Vaccine Acceptance
(Washington, DC : World Bank, 2022-06) Bussolo, Maurizio; Torre, Iván
The information set from which individuals make their decision on vaccination includes signals from trusted agents, such as governments, community leaders, and the media. By implementing restrictions, or by relaxing them, governments can provide a signal about the underlying risk of the pandemic and indirectly affect vaccination take-up. Rather than focusing on measures specifically designed to increase vaccine acceptance, this paper studies how governments’ nonpharmaceutical policy responses to the pandemic can modify the degree of preventive health behavior, including vaccination. To do so, the paper uses repeated waves of a global survey on COVID-19 beliefs, behaviors, and norms covering 67 countries from August 2020 to February 2021. Controlling for the usual determinants, the analysis explores how individuals’ willingness to get vaccinated is affected by changes in government restriction measures (as measured by the Oxford Stringency Index). This relationship is mediated by individual characteristics, social norms (social pressure to conform with what most people do), and trust in government institutions. The results point to a complex picture as the implementation of restrictions is associated with increased acceptance in some contexts and decreased acceptance in others. The stringency of government restrictions has significant positive correlations with vaccine acceptance in contexts of weak social norms of vaccine acceptance and lower trust in government. In countries or communities where social norms are tighter and trust in government health authorities is high, vaccine acceptance is high but less sensitive to changes in policies. These results suggest that the indirect effect of government policy stringency is stronger among individuals who report lower trust and weaker social norms of vaccine acceptance.
Hidden Potential: Rethinking Informality in South Asia
(Washington, DC : World Bank, 2022) Bussolo, Maurizio (ed.)
Informality remains widespread in South Asia despite decades of economic growth. The low earnings and high vulnerability in the informal sector make this a major development issue for the region. Yet, there is no consensus on its causes and consequences, with the debate polarized between a view that informality is a problem of regulatory evasion and should be eradicated, and another which equates informality with economic exclusion. These views are at odds with the heterogeneity observed among informal firms. Recent advances in analyzing informality as the outcome of firm dynamics in distorted economic environments can help reconcile them. Building on these advances, the approach adopted in this volume clarifies that there are different types of informality, with different drivers and consequences. Using this approach, the papers in this volume revisit old questions about the relationship of informality to regulation and taxation, and also pose new ones, such as how digital technologies and multi-faceted policy designs can improve prospects in the informal sector. They have four main messages. First, informality in South Asia is dominated by firms that happen to be outside the purview of regulations because they are small, as opposed to those that remain small to escape regulations. Second, reforms of business regulations tend to have small direct effects on the informal sector, though they could have sizable indirect impacts on it if they succeed in removing major inefficiencies in the broader economy. Third, e-commerce platforms (and similar technologies) offer new opportunities to informal firms and workers, but many of them lack complementary skills or credit to benefit from such technologies. Fourth, a combination of contributory and non-contributory programs recognizing the heterogenous saving capacities of informal workers may be necessary to achieve more universal coverage of social insurance. A multi-pronged strategy is needed to tackle the developmental challenges presented by informality.
Workers at Risk: Panel Data Evidence on the COVID-19 Labor Market Crisis in India
(World Bank, Washington, DC, 2021-03) Kotia, Ananya; Bussolo, Maurizio; Sharma, Siddharth
The COVID-19 pandemic is having unequal impacts. Research has highlighted that across race, gender, age, and income groups, the health and economic consequences of this crisis are far from uniform and other preexisting inequalities have been exacerbated. This paper focuses on the differential impact on the formal and informal segments of the labor market in India, using data from a large household panel survey and employing a difference-in-differences event study approach. Within the same industry and district, initially informal wage workers were significantly more vulnerable to the loss of employment than initially formal workers during the early phase of COVID-19 (April 2020). Furthermore, income declined significantly more for households whose head worked as an informal wage worker than for households with a formally employed head. However, the post-COVID employment and income differentials between informal and formal workers narrowed after April 2020. By July 2020, the decline in income (from the pre-COVID baseline of February 2020) was not significantly different across households with informally and formally employed heads, suggesting that while informal workers were affected more severely by the early COVID-19 shock, they also recovered faster from it.
It Takes Two (To Make Things Right): Women's Empowerment and Couple Concordance in South Asia
(World Bank, Washington, DC, 2021-02) Sarma, Nayantara; Bussolo, Maurizio; Williams, Anaise
This paper empirically assesses the relevance of women’s agency for family health and domestic violence outcomes in South Asia. It discerns three forms of agency by considering how decisions are taken within the household and highlights differences in the intensity of the correlation between these forms of agency and household members’ well-being. Decision-making reports are matched by both spouses and classified as: (i) the wife participates in decisions, and both husband and wife agree about her role; (ii) the wife reports participating in decisions, but the husband does not recognize her role, that is, she takes power; and (iii) the husband reports that the wife participates in decisions, but the wife does not, that is, he gives power. Using cross-sectional data from six South Asian countries, the paper finds that the association between all forms of women’s agency and the health of their children is statistically significant and economically meaningful. In the cases of being underweight, used prenatal help, and modern use of contraception, and especially in the case of domestic violence, the spousal agreement variant of women’s agency has stronger beneficial correlations vis-à-vis the taking power or giving power variants. The paper emphasizes the importance of spousal support and the contextual component of women’s agency in South Asia, where social norms mediate women’s decision making and outcomes.
Feeling Poor, Feeling Rich, or Feeling Middle-Class: An Empirical Investigation
(World Bank, Washington, DC, 2020-10) Lebrand, Mathilde; Bussolo, Maurizio; Torre, Ivan; Torre, Iván
Based on their objective economic situation and comparing with their peers, individuals form perceptions of their economic position in a society. Data from the three waves of the Life in Transition surveys of European countries show that these perceptions systematically deviate from the rankings obtained using consumption levels. People position themselves in the middle ranks in larger numbers than those who are in the middle ranks according to their consumption levels. Correspondingly, many people who objectively are classified in the top, richest, or bottom, poorest, ranks subjectively feel that they are in the middle class. This puzzling "bunching in the middle" is the focus of this paper. Explanations are tested and discarded that consider subjective perceptions as misperceptions or the result of other mistakes due to data limitations (such as tail bias). The paper concludes that rather than reflecting a subjective assessment of the distribution of welfare, subjective rankings reveal subjective economic well-being. The paper show that monetary consumption is a strong predictor of subjective economic well-being, but that the latter is influenced by many other factors, including economic security, proxied by employment status or other measures of human capital, such as health and education. These findings have policy relevance, since redistribution measures aiming at simply protecting consumption levels may not be sufficient to restore the economic well-being provided by having full-time secure types of employment.