nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2010‒10‒09
three papers chosen by
Koen Schoors
Ghent University

  1. Returns to Education in Four Transition Countries: Quantile Regression Approach By Staneva, Anita; Arabsheibani, Reza; Murphy, Philip D.
  2. Regional Entrepreneurial Heritage in a Socialist and a Post-Socialist Economy By Michael Wyrwich
  3. A Different Look at Lenin's Legacy: Trust, Risk, Fairness and Cooperativeness in the Two Germanies By Heineck, Guido; Süssmuth, Bernd

  1. By: Staneva, Anita (Swansea University); Arabsheibani, Reza (Swansea University); Murphy, Philip D. (Swansea University)
    Abstract: This paper uses quantile regression techniques to analyze heterogeneous patterns of return to education across the conditional wage distribution in four transition countries. We correct for sample selection bias using a procedure suggested by Buchinsky (2001), which is based on a Newey (1991, 2009) power series expansion. We also examine the empirical implications of allowing for the endogeneity of schooling, using the control function approach proposed by Lee (2007). Using household data from Bulgaria, Russia, Kazakhstan and Serbia in 2003, we show that the return to education is heterogeneous across the earnings distribution. It is also found that accounting for the endogeneity of schooling leads to a higher rate of return to education.
    Keywords: rate of return to education, endogeneity, sample selection, quantile regression
    JEL: C14 I2 J24
    Date: 2010–09
  2. By: Michael Wyrwich
    Abstract: This paper sheds light on regional differences of self-employment in a socialist economy on the eve of its transition toward a market economy and differences with regard to start-up activities after transition. It shows that regions with a long entrepreneurial tradition have higher self-employment rates than regions where these traditions played only a minor role before the introduction of a socialist centrally planned economy. These regions have also higher start-up rates after transition. It seems entirely likely that some regions have a certain entrepreneurial heritage that is an important resource embedded in the region. Even the introduction of socialism did not eradicate or reverse the geography of private sector activity. It is recommended that policy should stimulate and activate region-specific entrepreneurial potentials to attain a sustainable regional development.
    Keywords: Entrepreneurial Culture; Transition
    JEL: L26 P25 R11
    Date: 2010
  3. By: Heineck, Guido (IAB, Nürnberg); Süssmuth, Bernd (University of Leipzig)
    Abstract: What are the long-term effects of Communism on economically relevant notions such as social trust? To answer this question, we use the reunification of Germany as a natural experiment and study the post-reunification trajectory of convergence with regard to individuals’ trust and risk, as well as perceived fairness and cooperativeness. Our hypotheses are derived from a model of German reunification that incorporates individual responses both to incentives and to values inherited from earlier generations as recently suggested in the literature. Using data from the German Socio-Economic Panel, we find that despite twenty years of reunification East Germans are still characterized by a persistent level of social distrust. In comparison to West Germans, they are also less inclined to see others as fair or helpful. Implied trajectories can be interpreted as evidence for the passing of cultural traits across generations and for cooperation being sustained by values rather than by reputation. Moreover, East Germans are found to be more risk loving than West Germans. In contrast to trust and fairness, full convergence in risk attitude is reached in recent years.
    Keywords: social trust, risk attitudes, political regimes, German reunification
    JEL: P51
    Date: 2010–09

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