nep-tra New Economics Papers
on Transition Economics
Issue of 2010‒06‒18
fourteen papers chosen by
J. David Brown
Heriot-Watt University

  1. Agricultural Development in Traditional Asian Economies: Observations Prompted by a Livestock Study in Vietnam By Tisdell, Clem
  2. China's Higher Education Expansion and its Labor Market Consequences By Li, Shi; Xing, Chunbing
  3. Migration, Self-Selection, and Income Distributions: Evidence from Rural and Urban China By Xing, Chunbing
  4. Legacy from the Transition?: Alcohol Consumption by Young Adults in Ukraine By Alexandra Avdeenko; Carlos Bozzoli; Tilman Brück
  5. Prospects of liberalization for S&T policies in Russia: institutional analysis By Kirdina, Svetlana
  6. Trade And Inequality With Limited Labor Mobility: Theory And Evidence From China By Muqun Li; Ian Coxhead
  7. Formal Education, Mismatch and Wages after Transition: Assessing the Impact of Unobserved Heterogeneity Using Matching Estimators By Lamo, Ana; Messina, Julián
  8. Health and the Urban Transition Effects of Household Perceptions, Illness, and Environmental Pollution on Clean Water Investment By Spencer, James H.
  9. On the Selection of Leading Economic Indicators for China By Bill Adams; Pieter Bottelier; Ataman Ozyildirim; Jing Sima-Friedman
  10. Technological asymmetry among foreign investors and mode of entry.. By Javorcik, Beata S.; Saggi, Kamal
  11. Poverty as Accumulating of Social Disadvantages: Sociological Analysis of Deprivation in Ukraine By Natalia Kharchenko
  12. Changes in the Czech Wage Structure: Does Immigration Matter? By Kamil Dybczak; Kamil Galuscak
  13. Holding together regionalism and the interaction of functional bureaucracies By Libman, Alexander; Vinokurov, Evgeny
  14. Possible approaches to benchmarking voluntary health insurance funds in Bulgaria By Salchev, Petko; Hristov, Nikolai; Georgieva, Lydia

  1. By: Tisdell, Clem
    Abstract: China began its economic reforms in 1979 and Vietnam followed in 1986. Since then both countries have experienced rapid economic growth, falling poverty rates and significant rises in per capita income. At the same time, substantial restructuring of their economies has occurred, a feature of which has been a decline in the relative contribution of agriculture to total employment and output. These changes are outlined. Significant changes have also occurred in the agricultural sectors of China and Vietnam and these are reviewed. In both countries, the livestock sector has grown in relative importance. Households are the main contributors to agricultural production but their individual holdings of land are small and households keeping livestock mostly only hold a few head. Given the exit of farmers from agriculture, pressures are mounting for increasing the size of agricultural units. This exit can add to economic efficiency and growth. Policies to facilitate movements from farm to non-farm employment are discussed and analysed. Property rights and the marketability of agricultural land can facilitate such movements and contribute to economic efficiency. In recent times, China and Vietnam have extended property rights in agricultural land and have increased its marketability. These measures are outlined. With further economic development and transition, it is predicted that these rights and the marketability of agricultural land will be further extended
    Keywords: Agricultural development, Asia, China, economic transition, farm employment, land reforms, land rights, livestock, non-farm employment, structural change, Agricultural and Food Policy, International Development, Livestock Production/Industries, Q10, Q15, Q18, O2,
    Date: 2010–05
  2. By: Li, Shi (Beijing Normal University); Xing, Chunbing (Beijing Normal University)
    Abstract: Using a 1/5 random draw of the 1% census of 2005, we investigate how China’s higher education expansion commenced in 1999 affects the education opportunities of various population groups and how this policy affects the labor market. Treating the expansion as an experiment and using a LATE framework, we find that higher education expansion increased the probability of go to college tremendously. Different populations “benefit” from this policy differently however. Minority female, those from central-western region and from rural areas are less likely to benefit from it. One-child families are more responsive to this policy. Using higher education resources at the provincial level as another dimension of variation, and using a difference-in-difference strategy, we find that the education expansion decreased the within sector inequality of population with above high school (inclusive) education. This is primarily due to the increase of the income level for high school graduate. That of the college graduate deceased, but only slightly and not significantly.
    Keywords: China, higher education expansion, LATE, difference in difference, income level
    Date: 2010–05
  3. By: Xing, Chunbing (Beijing Normal University)
    Abstract: As massive rural residents leave their home countryside for better employment, migration has profound effects on income distributions such as rural-urban income gap and inequalities within rural or urban areas. The nature of the effects depends crucially on who are migrating and their migrating patterns. In this paper, we emphasize two facts. First, rural residents are not homogeneous, they self-select to migrate or not. Second, there are significant differences between migrants who successfully transformed their hukou status (permanent migrants) and those did not (temporary migrants). Using three coordinated CHIP data sets in 2002, we find that permanent migrants are positively selected from rural population especially in terms of education. As permanent migration takes more mass from the upper half of rural income density, both rural income level and inequalities decrease, the urban-rural income ratio increases at the same time. On the contrary, the selection effect of temporary migrants is almost negligible. It does not have obvious effect on rural income level and inequalities.
    Keywords: migration, self-selection, income distribution, China
    JEL: O15
    Date: 2010–05
  4. By: Alexandra Avdeenko; Carlos Bozzoli; Tilman Brück
    Abstract: The study analyses the effects of transition on the amount and patterns of alcohol consumption. We test the hypothesis of how far negative experiences induced by the collapse of the Soviet Union have led to drinking in the young generation of Ukrainians. We use data coming from the Ukrainian Longitude Monitoring Survey (ULMS) to identify both determinants and patterns of alcohol consumption among young adults. We find that financial strain in the household increases the probability of drinking in the cohort of young adults. Moreover, we also identify an intergenerational link in drinking behaviour, which is often neglected in the literature.
    Keywords: alcohol consumption, Ukraine, economic transition, young adults
    JEL: D1 I18
    Date: 2010
  5. By: Kirdina, Svetlana
    Abstract: The objective of the paper is to define the trajectory of economic institutional reforms in Russia as a framework of S&T policies. The methodology of this research is based upon the institutional matrices theory (Кирдина, 2001; Kirdina, 2003). The hypothesis claims that the “institutional nature” of Russia defines its prospects of liberalization and needs the active implementation of liberal market institutions policy only within a framework of modernization of redistributive state economic system. Modern S&T policy in Russia demonstrates the implications of such kind of development. The new institutional form of State Corporation that is non-profit organization under government regulation has been widely developed for last 3 years. The main sphere of State Corporations activity is high-tech development. The share of State Corporations in the state budget is more than 20% and it is constantly increasing.
    Keywords: institutional matrices theory; X- and Y-economies; Russia; state regulation; S&T policy
    JEL: O32 K11 P00 H11 B52 D42 E61 O52 B41
    Date: 2010–05–24
  6. By: Muqun Li; Ian Coxhead
    Abstract: Does globalization increase inequality in developing countries, and ifso, how? In a theoretical model of a regionally heterogeneous economy, we show how different regional rates of technical progress due to trade and FDI interact with constraints to unskilled labor mobility. As favored regions benefit more from trade, their growing demand for skills drains skilled workers from disadvantaged areas, and average incomes in the former grow faster than in the latter. Moreover, this unbalanced regional growth may also raise inequality within each region. It could even reduce absolute income per capita in the less favored region. We test these predictions with Chinese data from the Open Door era. Results confirm that different regional growth rates have increased both interregional andintraregional inequality. Moreover, growth of skills-based export industries in coastal regions is associated, other things equal, with lower incomes for the poor in inland provinces.
    Date: 2010–06
  7. By: Lamo, Ana (European Central Bank); Messina, Julián (World Bank)
    Abstract: This paper studies the incidence and consequences of the mismatch between formal education and the educational requirements of jobs in Estonia during the years 1997-2003. We find large wage penalties associated with the phenomenon of educational mismatch. Moreover, the incidence and wage penalty of mismatches increase with age. This suggests that structural educational mismatches can occur after fast transition periods. Our results are robust for various methodologies, and more importantly regarding departures from the exogeneity assumptions inherent in the matching estimators used in our analysis.
    Keywords: education mismatch, wage determination, matching estimators
    JEL: J0
    Date: 2010–05
  8. By: Spencer, James H.
    Abstract: Recent efforts to reinvigorate the connections between urban planning and health have usefully brought the field back to one of its original roles. Current research, however, has focused on industrialized cities, overlooking some of the important urbanization processes in poor countries. This paper describes an emerging ‘health transition’ and the importance of socio-ecological approaches to understanding new health challenges in the developing world and uses the empirical case of Vietnam to examine the development dilemma of new industrial health concerns associated with economic development. The paper summarizes original qualitative data suggesting that one of the main benefits and rationales of the system is the improvement in public health that it has promoted. Using a related original sample survey (n=200) from 2005, the paper then tests a set of hypotheses about the relationship between illness, connections to the new system, and the role of pollution of natural water sources in illness. Findings suggest that fears of illness, and in particular new forms of industrial illnesses, are growing with rapid development as old forms of acute water borne disease are of less concern.
    Keywords: Water supply, perceptions, environmental health, transition, urbanization
    Date: 2010
  9. By: Bill Adams (The Conference Board); Pieter Bottelier (The Conference Board); Ataman Ozyildirim (The Conference Board); Jing Sima-Friedman (The Conference Board)
    Abstract: Leading indicators represent variables that tend to precede and predict coincident indicators of general economic activity, which as a multivariate concept, can be measured with the help of metrics on employment, production, total income and sales in real (inflation adjusted) terms. In many countries, composite indexes of leading economic indicators (LEI) are used to help predict short-term cyclical fluctuations of the economy in conjunction with composite indexes of coincident economic indicators (CEI). They also serve to analyze short-term macroeconomic dynamics of the business cycle. This paper reviews the available monthly and quarterly leading indicators for China, and develops a composite index following the indicators approach of The Conference Board, which publishes the U.S. LEI. Predicting turning points in the business cycle is extremely difficult, but the long history of research on leading indicators provides empirical evidence that LEIs can help in this task. This paper discusses our selection of leading indicators of the Chinese economy over 1986-2009. We evaluate our selection of leading indicators against the chronology of business and growth cycles.
    Date: 2010–05
  10. By: Javorcik, Beata S.; Saggi, Kamal
    Abstract: How does the preferred entry mode of foreign investors depend on their technological capability relative to that of their rivals? This article develops a simple model of entry mode choice and evaluates its main testable implication using data on foreign investors in Eastern European countries and the successor states of the Soviet Union. The model considers competition between two asymmetric foreign investors and captures the following trade-off: while a joint venture (JV) helps a foreign investor secure a better position in the product market vis-à-vis its rival, it also requires that profits be shared with the local partner. The model predicts that the efficient foreign investor is less likely to choose a JV and more likely to enter directly relative to the inefficient investor. Our empirical analysis supports this prediction: foreign investors with more sophisticated technologies and marketing skills (relative to other firms in their industry) tend to prefer direct entry to JVs. This empirical finding is robust to controlling for host country–specific effects and other commonly cited determinants of entry mode.
    JEL: F13 O32 D F23
    Date: 2010
  11. By: Natalia Kharchenko
    Abstract: The aim of the study was to create an index of socio-economic deprivation, to find main determinants of deprivation and to investigate the differences and similarities in the attitudes and expectations of groups with different deprivation's level.
    Date: 2010
  12. By: Kamil Dybczak; Kamil Galuscak
    Abstract: Using the Albrecht et al. (2003) version of the Machado and Mata (2005) decomposition technique along the wage distribution, we find that immigrant workers do not affect changes in the Czech wage structure between 2002 and 2006 despite their substantial inflows. Instead, changes in the wage structure are explained solely by increasing returns of native workers, while changes in the observed characteristics of native workers, particularly a rising level of education, are responsible for increasing wage dispersion. The sizeable inflows of foreign workers in the sample years are concentrated among young workers with primary and tertiary education and are primarily due to rising labour demand. The negative immigrant-native wage gaps are persistent along the wage distribution and are explained mainly by differences in observed characteristics. We provide evidence on increasing returns to education of native workers along the wage distribution. The returns are higher in 2006 than in 2002, in line with the evidence in the previous literature.
    Keywords: Immigration, matched employer-employee data, quantile regression, wage gap decomposition, wage structure.
    JEL: J31 C21
    Date: 2009–12
  13. By: Libman, Alexander; Vinokurov, Evgeny
    Abstract: The paper focuses on regional integration projects established by countries originally comprising a single political entity after its collapse. It shows that in this framework the existing economic ties between countries are likely to adversely affect the interests of functional bureaucracy to support regional integration given the cutting off the existing connections is often more promising from the point of view of the budget expansion. Hence, interaction of national and supranational bureaucracies is unlikely to generate impetus for increasing regional cooperation. On the other hand, external economic shocks are likely to boost “holding-together” regionalism. The empirical case for the analysis is that of the regional cooperation of the post-Soviet countries in the area of transportation and power utilities.
    Keywords: holding-together regionalism; regional integration; bureaucracy; post-Soviet countries
    JEL: F15 P26
    Date: 2010
  14. By: Salchev, Petko; Hristov, Nikolai; Georgieva, Lydia
    Abstract: Following the adoption of the Health Insurance Law in Bulgaria (1999), which provided the legal framework for the development of the voluntary health insurance, several health insurance funds had been established. Bulgaria had two licensed voluntary health insurance funds in 2001; in 2003 their number grew to six; and in 2009 this number stands over twenty. Despite the increased number of funds in recent years, their share of healthcare spending stayed at 1-1.5%, which is below European average. To this date, there are no serious and profound studies in the field among the scientific community in Bulgaria. The economic data published by the Commission of Financial Surveillance (CFS), conforms to EC regulations, but do not allow non-specialists to assess realistically voluntary health insurance funds (VHIF). This article introduces a methodology for comparing VHIF and establishment of a complex index (Benchmark Index - BI) based on 5 groups of indicators, related to several available variables. This index is intended as a tool for analyzing the voluntary health insurance sector and managing resources through a set of analytic indicators and variables. It can be used to create a certain type of ranking of VHIF.
    Keywords: voluntary health insurance; market; comparing methods; benchmark index
    JEL: I11 G22 C42
    Date: 2010

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