nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2005‒03‒20
seven papers chosen by
Anna Y. Borodina
Perm State University

  1. The human capital heterogeneity at the Russian labor market By Borisov Gleb
  2. Determinants of unemployment duration in Ukraine By Kupets Olga
  3. Impact of joining the WTO on Ukrainian ferrous metallurgy By Eremenko Igor; Lisenkova Ekaterina
  4. Poverty, Inequality and Health: А case study of Armenia By Tamara Tonoyan
  6. Achieving stability in heterogeneous societies: multi-jurisdictional structures, and redistribution policies By Savvateev Alexey
  7. Models of supply functions competition with application to the network auctions By Vasin Alexander; Vasina Polina

  1. By: Borisov Gleb
    Abstract: The study raises the problem of human capital heterogeneity at the Russian labor market caused by non-random distribution of unobservable skills across the population of a transition country. At the beginning of the transition, people who were grown up in different times or cultures have distinct moral norms, behavioral patterns, preferences and the knowledge. This results in the differences in unobservable abilities and earnings capacity of people. We argue that cohort, a pre-transition occupation, an urban place of birth, and nationality might serve as proxies for unobservable skills in the transition. The cohort effects were separated by two ways. According to the first one, the logarithm of the real wages index was used as a proxy for current period. The second one is based on an assumption on the form of age-earnings profiles in Russia. The estimation results reveal the significance of all the proxies for unobservable abilities and the robustness of estimates. At the same time, conditioning of the effects of cohort and pre-transition occupation on gender is discovered.
    Keywords: Russia, transition, labor market, human capital, heterogeneity, vintage effect, cohort effect, earnings function, identification problem
    JEL: J31 O15 P21 P27
    Date: 2005–02–17
  2. By: Kupets Olga
    Abstract: This paper presents first evidence on the determinants of unemployment duration in Ukraine between 1997 and 2003, using individual-level data from the first wave of the Ukrainian Longitudinal Monitoring Survey (ULMS -2003). It investigates the conditional probability of an individual leaving unemployment to employment or economic inactivity in any particular month of his spell out of work by estimating it in a discrete time independent competing risks framework with flexible baseline hazard rates and gamma-distributed unobserved heterogeneity. The results in all specifications indicate no significant effect of receiving unemployment benefits but significant negative effect of having income from casual activities, subsidiary farming, household income or pension on the hazard of re-employment. Multivariate analysis also suggests that policies to reduce long-term unemployment should focus on older workers, less educated individuals, residents of small towns and rural area in the regions with relatively high unemployment rates.
    Keywords: Ukraine, long-term unemployment, unemployment insurance, Ukraine, semiparametric duration analysis, flexible baseline hazard
    JEL: J64 J68 P23
    Date: 2005–02–28
  3. By: Eremenko Igor; Lisenkova Ekaterina
    Abstract: The goal of our research is to study Ukraine’s accession to the WTO referring to one particular sector discussed most hotly in this context: metallurgy. Ukrainian metallurgy has two remarkable features: from one side, steel producers receive substantial subsidies; from the other side, Ukrainian metallurgical exports have been permanently brought under antidumping investigations. The purpose of this research is to study effects of both cases and find impact on metallurgy and total welfare. Results of partial equilibrium model shows that on balance the total gains for the Ukrainian economy are calculated to be above USD 343 million, or 1.1% of GDP, hence, in subsidies-antidumping duel there is no trade-off for Ukrainian economy.
    Keywords: Ukraine, metallurgy, WTO, antidumping, subsidization
    JEL: F13 F14 L61 H21 H25
    Date: 2005–02–22
  4. By: Tamara Tonoyan (Armenian Medical Institute)
    Abstract: The paper describes the issue of the impact of poverty and income inequality on the health of the population using Armenia as a case study. In the framework of this paper author provides an overview of research relating to inequalities in health to the disadvantage of the poor, and to changes in impoverishment and income inequality associated with payments for health care. After demonstrating the logic of the investigation, the paper recapitulates the information about results of reforms that do not appear to meet all the objectives of health care policy. The paper indicates that the gains in freedom have been accompanied by the losses of many basic economic and social services that the population had come to enjoy and expect. At the same time the success of reforms applied in Armenia is often evaluated against improvements in the health status of the population. Funding shortages often means that even vulnerable groups have to pay. Thus, the principle of equity with respect to financing and access is undermined. It is emphasized that reducing poverty and income inequality should be grounded in a pro-poor growth approach, i.e. for equality to be achieved economic growth in the development process should be deliberately adapted to the needs of the poor. The paper concludes that there is undoubtedly a large gap in our knowledge on how best to reach the poor in the health sector. In order to fill this gap, more work is needed along the lines of the above studies related to health sector inequalities and public policy. There is necessity to encourage the development of insurance companies, pension funds, and funds for public health care education, which have not yet been properly undertaken.
    Keywords: poverty, inequality, health, income distribution
    JEL: D63 I11 I12 I18
    Date: 2005–02–01
  5. By: Sharon Eicher
    Abstract: Dollarization comes in several forms. The type that this paper examines is asset substitution, when savers hold dollar assets in bank accounts, instead of local currency. It is limited to the transition economy of Kazakhstan. This paper estimates demand for dollar accounts and shows that avoidance of inflation risk, rather than avoidance of exchange rate devaluation of savings, is the most important in explaining dollarization. This result is unexpected. This study examines data from Kazakhstan. Kazakhstan is seen as having a strong banking system and a healthy economy for a former Soviet Republic. It is seen as one of the most market-oriented, FSU countries. However, Kazakhstan also has a large demand for a means of storing savings in dollars, rather than in the local currency. This is particularly curious, when the local currency is appreciating relative to the U.S. dollar. This demand in less prosperous FSU countries is likely to be even greater. The paper combines data and statistical methods with anecdotal information in order to improve our understanding of a paradoxical occurrence.
    Date: 2004–05–01
  6. By: Savvateev Alexey
    Abstract: Consider a “linear world” populated by several agents. These agents’ locations are identified with optimal variety of a horizontally differentiated local public good. Agents are to be partitioned into several communities (hereafter, groups), and each group chooses a variety of public good to be produced and consumed by members of that group via the majority voting procedure. It is shown that a stable partition may fail to exist, where stability means that no potential group would like to secede and form a new community. At the same time, compensation schemes are proposed which guarantee the existence of a stable partition. Small societies are studied in detail, as well as certain special types of distributions of agents’ locations.
    Keywords: Russia, stability, partitions, redistribution, core of a cooperative game
    JEL: D70 H20 D73
    Date: 2004–12–25
  7. By: Vasin Alexander; Vasina Polina
    Abstract: This paper studies different auctions of supply functions in a local market and a simple network market of a homogeneous good with two nodes and a fixed transmission loss per unit of the good. We study problems of existence, uniqueness and computation of Nash equilibria for these models. We also obtain the estimate of Nash equilibria deviation from the Walrasian equilibrium for each variant. We consider the problem of optimal auction organization from the point of view of the social welfare maximization.
    Keywords: Russia, supply function auction, Cournot, Vickrey, Russian electricity market
    JEL: D44
    Date: 2005–03–01

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