nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2016‒10‒09
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Does working abroad affect political opinions? Evidence from Moldova By Ruxanda Berlinschi
  2. University Revenue within a New Structure of Resources By Elena A. Nikolayenko; Liudmila M. Filatova
  3. Corrupt bureaucrats, bad managers, and the slow race between education and technology By Lyubimov, Ivan
  4. Understanding the distribution of economic benefits from improving coastal and marine ecosystems By Kristine Pakalniete; Juris Aigars; Mikolaj Czajkowski; Solvita Strake; Ewa Zawojska; Nick Hanley
  5. Do migrants think differently? Evidence from East European and post-Soviet states By Ruxanda Berlinschi; Ani Harutyunyan
  6. Search-and-matching frictions and labor market dynamics in Latvia By Buss, Ginters

  1. By: Ruxanda Berlinschi
    Abstract: This paper investigates the effects of work experience abroad on political opinions using survey data from Moldova, a former soviet republic caught in an ideological battle between Russia and the West, with high emigration rates to both destinations. Contrarily to studies conducted in Africa or Latin America, we find no effect of past migration on democratic participation or on critical governance assessment. Likewise, no effect is found on domestic policy preferences. The one dimension strongly associated with migration experience is geopolitical preference, whereby return migrants from former Soviet countries are more likely to support closer ties with Russia, while return migrants from Western countries show higher support for EU integration, controlling for economic, demographic and ethnic confounding factors. For identification, we instrument individual migration with district level migrant networks. IV regressions show that only work experience in Western countries affects geopolitical preferences.
    Keywords: return migration, political opinions, Moldova, survey data
    Date: 2016
  2. By: Elena A. Nikolayenko (National Research University Higher School of Economics); Liudmila M. Filatova (National Research University Higher School of Economics)
    Abstract: Market reform in Russia has had a positive impact on economic sectors and has generally led to higher production quality. However, the education sector (especially professional training) has been an exception. Although education reform was undertaken with the goal of modernization, the general level of value added in the education sector has not grown in the past four years. This article examines changes in higher education under the new configuration of resources based on the income structure of universities located in the Central Federal District (CFD). The results evidence a change in financial support from different income sources and in cost structures at university level. These are the result of higher education reform and university support programs aimed at enhancing the academic and research capacity of the leading Russian universities and developing a competitive national education system. This paper reveals trends in the financing of higher education institutions using statistical and economic analysis, comparing the income structures of different groups of universities and their cost structures. Analysing the dynamics of the aggregate indicators, we study cost structures considering university priorities to increase teaching staff salaries and income from their research and development projects. The study assesses the implications of increasing regional university differentiation in terms of funding and income sources, which lead, considering the commitment to increase the faculty’s salaries, to a shortage of funds for the maintenance of property. These circumstances force the universities to make considerable efforts to find extra-budgetary funding sources in a situation of shrinking effective demand, which jeopardises the development opportunities for a large proportion of regional universities
    Keywords: higher education resources, number of employees with higher education, value added in education, income structure
    JEL: H52 I22 I23
    Date: 2016
  3. By: Lyubimov, Ivan
    Abstract: ​We study a developing economy in which the representative firm’s production function exhibits complementarities between human capital and the available level of technology. The firm invests in the acquisition of new technology, while employees decide how much human capital to acquire. The rate of human capital accumulation positively affects the economy’s growth rate, and therefore in our baseline case a reform that improves the educational system boosts growth. An important caveat, however, is that the absence of robust institutions may lead to lax enforcement of property rights and limit the incentives for firms to invest in new technology. The lack of investment in technology constrains demand for human capital and undermines the success of the education reform. It can even lead to a brain drain as individuals take advantage of the education reform and then move to an economy with higher demand for their acquired skills. We also consider our model findings with respect to the real-world case of Russia. Our main conclusion is that measures to improve the school system need to be accompanied by other institution-building measures that enhance property rights, promote good management practices and reduce incentives to engage in corrupt behaviors.
    Keywords: reforms, education, institutions, growth diagnostics
    JEL: O43 P16
    Date: 2016–09–26
  4. By: Kristine Pakalniete (AKTiiVS Ltd., Latvia); Juris Aigars (Latvian Institute of Aquatic Ecology, Latvia); Mikolaj Czajkowski (University of Warsaw, Department of Economics, Poland); Solvita Strake (Latvian Institute of Aquatic Ecology, Latvia); Ewa Zawojska (University of Warsaw, Department of Economics, Poland); Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews)
    Abstract: The ecological status of coastal and marine waterbodies world-wide is threatened by multiple stressors, including nutrient inputs from various sources and increasing occurrences of invasive alien species. These stressors impact the environmental quality of the Baltic Sea. Each Baltic Sea country contributes to the stressors and, at the same time, is affected by their negative impacts on water quality. Understanding who benefits from improvements in coastal and marine waters is key to assessing public support for policies aimed at achieving such changes. We propose a new approach to account for variability in benefits related to differences in socio-demographics of respondents, by using a structural model of discrete choice. Our method (1) provides a convenient way of incorporating a wide range of socio-demographics as explanatory variables in conditional multinomial logit models without the risk of collinearity, and (2) is more statistically efficient than the alternative, typically used approaches. The new technique is applied in a study which examines the preferences of Latvian citizens towards improvements of the coastal and marine environment quality that could help the Baltic Sea waters of Latvia reach Good Environmental Status as required by the European Union's Marine Strategy Framework Directive. Applying the discrete choice experiment method, we find that overall, Latvians are willing to pay for reducing losses of biodiversity, for improving water quality for recreation by reduced eutrophication, and for reducing new occurrences of invasive alien species. A significant group within the sample seems not to value environmental improvements in the Baltic Sea, and, thus,is unwilling to support costly measures for achieving such improvements. The structural model of discrete choice reveals substantial heterogeneity among Latvians towards changes in the quality of coastal and marine waters of Latvia.
    Keywords: good environmental status, coastal and marine water quality, biodiversity, invasive alien species, eutrophication, discrete choice experiment, observed preference heterogeneity, socio-demographic characteristics, hybrid choice model
    JEL: Q51 Q25 Q57 Q58
    Date: 2016–09
  5. By: Ruxanda Berlinschi; Ani Harutyunyan
    Abstract: This research analyzes differences in values and beliefs between individuals in European and post-Soviet states who intend to emigrate and those who do not. In particular, we investigate which political, economic and social values and beliefs are significant determinants of the intention to emigrate, after controlling for relevant socio-economic and demographic confounding factors. The results indicate that self-selection patterns exist in some dimensions, such as evaluation of home country governance and institutions, political participation and trust in other people, while they are absent in other dimensions, such as economic liberalism, views on democracy and free markets. Results also indicate that migrant self-selection patterns are heterogeneous across regions. This analysis aims to improve our understanding of the determinants of emigration, as well as of its possible consequences on the dynamics of governance and institutions.
    Keywords: Migration determinants, Culture, Transition economies
    Date: 2016
  6. By: Buss, Ginters
    Abstract: This paper examines, in an estimated, full-fledged New Keynesian DSGE model with Nash wage bargaining, sticky wage and high value of leisure akin to Christiano, Trabandt and Walentin (2011), whether search-and-matching frictions in labor market can explain aggregate labor market dynamics in Latvia. If vacancies are not observed, the model can, to a reasonable degree, generate realistic variance and dynamics of unemployment, and the correlation between unemployment and (latent) vacancies, but at the expense of too volatile vacancies. As a by-product, one-quarter ahead forecasts of hours worked and GDP exhibit less excess volatility and thus are more precise, compared to a model without search-and-matching frictions. However, if both unemployment and vacancies are observed and a shock to the matching efficiency is allowed for, then the cyclical behavior of forecasted vacancies - and the correlation between unemployment and vacancies - tends to counter the data (to the benefit of better fit of vacancies’ volatility), and the smoothed matching efficiency is counter-intuitively counter-cyclical. Hence the model cannot fit the three statistics - variance of unemployment and vacancies, and the correlation between the two - simultaneously.
    Keywords: DSGE model, unemployment, small open economy, Bayesian estimation, currency union, forecasting
    JEL: E0 E3 F0 F4 G0 G1
    Date: 2015–09

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