nep-tra New Economics Papers
on Transition Economics
Issue of 2013‒10‒25
sixteen papers chosen by
J. David Brown
IZA (Institute for the Study of Labor)

  1. Party Membership and State Jobs in Urban China By Ma, Yuanyuan; Walsh, Patrick Paul
  2. Simulating poverty in Europe : the potential contributions of employment and education to reducing poverty and social exclusion by 2020 By Ajwad, Mohamed Ihsan; Simler, Kenneth; Azam, Mehtabul; Dasgupta, Basab; Bonch-Osmolovskiy, Misha; Topinska, Irena
  3. Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment By Danzer, Natalia
  4. Growth Accounting Analysis in China 1978-2009 By Kang, Lili; Peng, Fei
  5. Does Regular Economic News from Emerging Countries Move Markets? Evidence from Chinese Macro Announcements By Christopher F Baum; Marketa W. Halova; Alexander Kurov
  6. Economic Reform and Productivity Convergence in China By Kang, Lili; Peng, Fei
  7. Foreign Direct Investment across China: what should we learn from spatial dependences? By C�cile BATISSE; Mary-Fran�oise RENARD; Nasser ARY TANIMOUNE
  8. Россия и Украина: вопросы социально-экономического развития в контексте взаимных отношений By Vardomsky L.B.; Pylin A.G.; Sokolova T.V.; Shurubovich A.V.
  9. Urbanization in China and how urban housing demand can be met By Gottschalch, Sören
  10. Policies for Inclusive Urbanisation in China By Vincent Koen; Richard Herd; Xiao Wang; Thomas Chalaux
  11. Returns from Income Strategies in Rural Poland By Falkowski, Jan; Jakubowski, Maciej; Strawinski, Pawel
  12. A Global Macro Model for Emerging Europe By Martin Feldkircher
  13. "Employment in Poland 2011 - Poverty and jobs" By Magda, Iga; Bukowski, Maciej; Buchholz, Sonia; Lewandowski, Piotr; Chrostek, Paweł; Kamińska, Agnieszka; Lis, Maciej; Potoczna, Monika; Myck, Michał; Kundera, Michał; Oczkowska, Monika
  14. Ukraine’s agriculture: potential for expanding grain supply. Economic and institutional challenges. By Szvetlana Acs; Oleksandra Borodina; Sergio Gomez y Paloma; Andriy Kharchenko
  15. Identifying Key Sectors in Croatian Economy Based on Input-Output Tables By Valerija Botric
  16. Competition for land and labour among individual farms and agricultural enterprises: Evidence from Kazakhstan's grain region By Petrick, Martin

  1. By: Ma, Yuanyuan (University College Dublin); Walsh, Patrick Paul (University College Dublin)
    Abstract: The "dual-track approach" for transition would have to be facilitated by an endogenous movement of workers away from the state into private jobs. Yet, using the Chinese Household Income Project Series (CHIPs) data for the year 2002, we document preferences and premiums for state jobs in urban China over private jobs. The state sector attracted the best workers in more favorable industries and regions and offered higher earning premiums. In addition, family party membership is found to be instrumental in allocating workers into state jobs which explains a good deal of the earnings differentials in terms of an endogenous state premium.
    Keywords: labor mobility, earnings differentials, party networks, state jobs, urban China
    JEL: J42 J62 O15 P23 R23
    Date: 2013–09
  2. By: Ajwad, Mohamed Ihsan; Simler, Kenneth; Azam, Mehtabul; Dasgupta, Basab; Bonch-Osmolovskiy, Misha; Topinska, Irena
    Abstract: This paper sheds light on the impact of improving employment and education conditions on poverty and social exclusion indicators. More specifically, it answers the following question: Will achieving the Europe 2020 national targets on employment and education lead countries to achieve the Europe 2020 poverty and social exclusion target with no other policy interventions? The paper presents a simple partial equilibrium model that is flexible enough to be implemented in a number of different settings and uses widely available household survey data. The simulation model analyzes poverty and social exclusion outcomes in response to changes in education completion rates and employment rates. The model is applied to ten of the European Union's new Member States -- Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, and Slovenia -- and the model's performance is evaluated through a validation exercise. The Europe 2020 national employment targets are ambitious in many of the new Member States, given historical employment patterns in the countries. Especially in light of the slow and uncertain recovery, labor markets remain weak and employment rates in 2020 could fall short of rates targeted by national policy makers. In this eventuality, the poverty and social exclusion goals may not be reached in many of the new Member States without additional policy measures.
    Keywords: Rural Poverty Reduction,Health Systems Development&Reform,Labor Policies,Achieving Shared Growth,Poverty Monitoring&Analysis
    Date: 2013–10–01
  3. By: Danzer, Natalia (Ifo Institute for Economic Research)
    Abstract: Are public sector jobs better than private sector jobs? To answer this question, this paper investigates observed differences in job satisfaction between public- and private-sector workers and disentangles the effect of worker sorting from the one caused by sector-specific job characteristics. A natural experiment – the massive privatization process in post-Soviet countries – allows correcting potential self-selection bias. Industry-specific privatization probabilities are assigned to workers based on unique individual-level survey information regarding pre-determined Soviet jobs during the 1980s. The results reveal a causal public-sector satisfaction premium and a negative selection of individuals into the public sector. Part of the public-private satisfaction gap can be explained by the different availability of fringe benefits in the two sectors.
    Keywords: public sector, job satisfaction, self-selection, quasi-experiment, privatization, fringe benefits
    JEL: J28 J45 J31 J32
    Date: 2013–09
  4. By: Kang, Lili; Peng, Fei
    Abstract: This paper applies the growth accounting model to Chinese economy at region and province levels from 1978 to 2009. We measure the components in the growth accounting model such as capital services, labour inputs and Total Factor Productivity (TFP) using various data sources. The economic growth has been decomposed into the contribution of physical capital, labour inputs, labour composition index (LCI) and TFP. We find that Chinese economic growth was mainly pushed by the growth of physical capital, especially in the fastest growing Coastal region. Labour inputs and TFP growth contribute more in the Interior and West regions. Moreover, the contribution shares of physical capital in labour productivity have been declining for the Coastal region, as the TFP contributions have been increasing over the same period. Our results show that the human capital formation from technological and institutional shifts is becoming more and more important in the Coastal region.
    Keywords: Growth Accounting, Total Factor Productivity, Labour Cost
    JEL: D24 J30 O47
    Date: 2013–10–20
  5. By: Christopher F Baum (Boston College; DIW Berlin); Marketa W. Halova (Department of Economics, Washington State University); Alexander Kurov (Department of Finance, West Virginia University)
    Abstract: We use scheduled macroeconomic announcements made by China to study how regular economic news from an important emerging economy moves the world financial and commodity markets. Using intraday futures data, we show that announcements about China's manufacturing purchasing manager index, industrial production and real gross domestic product have a significant effect on stock, bond, foreign exchange, and industrial commodity markets. This impact is sizeable compared to similar U.S. announcements and continues to grow. The results suggest that market participants view the Chinese macroeconomic announcements primarily as a signal of the state of the global economy rather than merely of China's domestic economy.
    Keywords: announcements, China, futures markets, stock markets
    JEL: G14 G15 F44
    Date: 2013–10–01
  6. By: Kang, Lili; Peng, Fei
    Abstract: This paper examines effects of the formation of physical and human capital on the growth of labour productivity, Total Factor Productivity (TFP) and wages in China, incorporating the market reform factors such as ownership shifts, population policy, openness and fiscal expenditures on education. We find that Chinese economic miracle is mainly pushed by the (physical) capital service rather than formation of human capital. The physical capital inputs contribute even more after 1994 as the returns to education decrease with the education expansion and increasing tuition fees. The traditional four economic regions of China show different growth patterns. The capital inputs mostly help the labour productivity growth in the West region and the wages growth in the Interior region, while human capital formation contributes to the TFP in all four regions. Moreover, provinces within each region present strong evidence of convergence of economic growth. The convergence is most prominent in the provinces within the Northeast and Coastal regions for labour productivity and TFP growth, suggesting fast technology spill-over within these regions.
    Keywords: labour productivity, convergence, regional inequality
    JEL: D24 D63 J24 O47
    Date: 2013–04–10
  7. By: C�cile BATISSE; Mary-Fran�oise RENARD; Nasser ARY TANIMOUNE (Universit� Ottawa)
    Abstract: The paper investigates the importance of spatial dependences on Foreign Direct Investment (FDI) localization across Chinese provinces over the 1992-2009. Based on exploratory spatial data analysis, spatial sigma-convergence and spatial Durbin specifications, we present a much clearer picture of FDI dispersion and spatial convergence across China by highlighting the spillover effects of FDI localization in Chinese provinces and regions. Our results are threefold. First, FDI convergence is more pronounced compared to the Central region, whereas the dispersion is greater when the Coastal and the Western regions are taken as reference points. Second, at the province level, FDI localization seems to present a substitutable configuration. Third, when controlling for the spatial distribution of FDI at the level of regions, it seems, conversely, that the FDI localization presents a complementary configuration. The finding resulting from the opposing configurations of the FDI localizations observed at the region and province levels seems to argue in favor of promoting FDI attractiveness policies based on regional complementarities.
    Keywords: China, Convergence, FDI, spatial panel data, spatial Durbin model
    JEL: R12 O53 C33
    Date: 2013
  8. By: Vardomsky L.B.; Pylin A.G.; Sokolova T.V.; Shurubovich A.V.
    Abstract: В докладе исследовано влияние взаимных отношений на социально-экономическое развитие России и Украины. Проанализированы реальные процессы в сфере взаимных связей, показана их сложность и противоречивость, дана оценка внутренних и внешних факторов, определяющих российско-украинские отношения. Рассмотрены особенности социально-экономического развития России и Украины, предпринята попытка выделить в них общее и различное, а также определить перспективы участия Украины в евразийских интеграционных проектах. The report investigates the effect of the mutual relations to the socio-economic development in Russia and Ukraine. The authors analyze the actual processes in the field of mutual relations, indicate their complexity and contradictions, estimate internal and external factors determining the Russian-Ukrainian relations. The features of the socio-economic development of Russia and Ukraine are investigated, an attempt to highlight their commonalities and differences and to determine the prospects of Ukraine's participation in the Eurasian integration projects is made.
    Keywords: Russia, Ukraine, socio-economic development, structural changes, financial situation, mutual trade, development priorities, integration choice, socio-cultural identity, standard of living, unequality, poverty
    JEL: F15 O11 O15 P52 R11
    Date: 2013–10–08
  9. By: Gottschalch, Sören
    Abstract: As it has rightfully been recognized by China's central government, successful urbanization will be decisive for the nation's future development. Key challenges will be to realize urbanization economies, improve production and innovation capabilities, direct urban and suburban growth and improve a more equal distribution of benefits of economic growth to the population. This paper contributes to the discussion with illuminating the main drivers of urbanization: (i) migration and (ii) in situ urbanization, and the housing necessities for migrants that evolve from them. It attempts to support the establishment of an integrated and sustainable urbanization path by considering migrants urban housing demand in China's socio economic transitional environment and indicating proper match. Migrant's housing choices are driven by underlying priorities determined by their characteristics and their exposure to the immediate socio economic environment. Therefore, both, migrant's characteristics as well as their immediate socio economic environment are put in relation to urban growth and its spatial features. The result is a set of housing supply forms and a set of distinctive migrant housing demands. Urban housing outcome and the match of housing supply and demand reveals housing preferences and housing market constraints. Based on these findings further housing recommendations can be given. --
    Keywords: Urbanization,Migration,Urban Housing Situation,Migrant Groups,Housing Demand,Housing Program
    JEL: D03 D14 D40 D52 D63 H53 J61
    Date: 2013
  10. By: Vincent Koen; Richard Herd; Xiao Wang; Thomas Chalaux
    Abstract: Urbanisation in China has long been held back by various restrictions on land and internal migration but has taken off since the 1990s, as these impediments started to be gradually relaxed. People have moved in large numbers to richer cities, where productivity is higher and has increased further thanks to agglomeration effects. In the process, the rural-urban income differential has narrowed. Urbanisation also entails costs, however, notably in the form of congestion, all the more so as public transport provision has not kept up. Demand for living space is set to continue to increase as living standards improve, putting pressure on land prices. This can be offset by relaxing the very stringent restrictions on the use of agricultural land for building. For migrants to better integrate in the cities where they work, their access and that of their families to education, health and other social services must continue to improve, in particular via further changes to the registration system, coupled with more market-based rules on land ownership and use. Comment favoriser une urbanisation plus inclusive en Chine Alors que l’urbanisation était depuis longtemps freinée en Chine par diverses restrictions appliquées au marché foncier et aux migrations internes, elle s’intensifie depuis que ces obstacles ont commencé à être progressivement levés dans les années 90. Les villes plus riches, caractérisées par une productivité élevée et en constante progression du fait des économies d’échelle générées par l’urbanisation, enregistrent un afflux massif de migrants. Parallèlement, l’écart de revenus entre zones rurales et urbaines s’est resserré. Néanmoins, l’urbanisation a aussi un coût, notamment illustré par les problèmes de congestion, aggravés par le développement insuffisant de l’offre de transports publics. La demande de surface habitable devrait rester orientée à la hausse sous l’effet de l’amélioration du niveau de vie, ce qui exercera une pression sur les prix des terrains. Cette pression peut être atténuée en assouplissant les restrictions très sévères appliquées à l’usage des terres agricoles à des fins de construction. Pour veiller à une meilleure intégration des migrants dans les villes où ils travaillent, il faut continuer à améliorer leur accès et celui de leurs familles à l’éducation, aux soins de santé et aux autres types de services sociaux, notamment en poursuivant la réforme du système d’enregistrement et en adoptant une réglementation plus axée sur le marché en ce qui concerne la propriété et l’utilisation des terres.
    Keywords: migration, housing, China, agriculture, scale economies, cities, urbanisation, land, public transport, pollution, hukou, agglomeration effects, social services, congestion, urban-rural divide, logement, congestion, hukou, économies d'échelle, transport public, urbanisation, clivage urbain-rural, effets d’agglomération, villes, pollution, Chine, migration, agriculture, services sociaux
    JEL: D63 H23 H41 H52 H53 H54 H55 H77 I39 J11 J21 J61 K11 K39 N35 O18 O53 P21 P25 P26 P27 P28 Q15 Q18 Q53 R11 R12 R14 R21 R23 R28 R31 R38 R41 R48 R52 R58
    Date: 2013–10–10
  11. By: Falkowski, Jan; Jakubowski, Maciej; Strawinski, Pawel
    Abstract: In order to stabilise and improve their income situation, rural households are strongly encouraged to diversify their activities both within and outside the agricultural sector. Often, however, this advice is only moderately pursued. This paper addresses issues of rural household income diversification in the case of Poland. It investigates returns from rural household income strategies using propensity score matching methods and extensive datasets spanning 1998-2008. Results suggest that returns from combining farm and off-farm activities were lower than returns from concentrating on farming or on self-employment outside agriculture. This differential is stable over time although returns from diversification have relatively improved after Poland’s accession to the EU. This is also visible in the fact that since 2006 returns from combining farm and off-farm activities have evened with returns from relying solely on hired off-farm labour, thus smoothing the difference observed before the accession. Further, over the analysed period, households pursuing the diversification strategy performed better than those relying solely on unearned income. Finally, in general, the income in households combining farm and off-farm activities was higher than in those combining two off-farm income sources.
    Date: 2013–08
  12. By: Martin Feldkircher
    Abstract: This paper puts forward a global macro model comprising 43 countries and covering the period from Q1 1995 to Q4 2011. Our regional focus is on countries in Central, Eastern and Southeastern Europe (CESEE) and the Commonwealth of Independent States (CIS). Applying a global VAR (GVAR) model, we are able to assess the spatial propagation and the time profile of foreign shocks to the region. Our results show that first, the region’s real economy reacts nearly equally strongly to an U.S. output shock as it does to a corresponding euro area shock. The pivotal role of the U.S.A. in shaping the global business cycle thus seems to partially offset the region’s comparably stronger trade integration with the euro area. Second, an increase in the euro area’s short-term interest rate has a negative effect on output in the long run throughout the region. This effect is stronger in the CIS as well as in Southeastern Europe, while it is comparably milder in Central Europe. Third, the region is negatively affected by an oil price hike, with the exception of Russia, one of the most important oil exporters worldwide. The oil-driven economic expansion in Russia seems to spill over to other – oil-importing – economies in CIS, thereby offsetting the original drag brought about by the hike in oil prices. Finally, our results corroborate the strong integration of advanced economies with the global economy. By contrast, the responses in emerging Europe are found to be more diverse, and country-specifics seem to play a more important role. JEL classification: C32, F44, E32, O54
    Keywords: Global VAR, transmission of international shocks, Eastern Europe, CESEE, great recession, emerging Europe, global macro model, foreign shock
    Date: 2013–09–23
  13. By: Magda, Iga; Bukowski, Maciej; Buchholz, Sonia; Lewandowski, Piotr; Chrostek, Paweł; Kamińska, Agnieszka; Lis, Maciej; Potoczna, Monika; Myck, Michał; Kundera, Michał; Oczkowska, Monika
    Abstract: This edition is devoted to the issue of poverty. Growth of prosperity is not distributed evenly among the Polish citizens, and some of them still cannot satisfy even basic needs. The improvement of an overall economic situation reduces risk of poverty in general. However, in case the risk occurs, efficient and effective support measures should be provided. First part of the report defines poverty, and explains the extent of the connection with such phenomena as economic deprivation or social exclusion. It is vital, as the exact criterion of poverty is ambiguous. Having discussed these issues, we elaborate on the characteristics of poverty in Poland as compared to those observed in other Member States of the European Union, as well as their regional and local dimensions. The key element of this part is to determine the causes of poverty, i.e. to what extent poverty results from the features of national and regional economy, and to what extent from individual characteristics of people. The topics introduced in this part form background for subsequent parts of the report. The second part is devoted to the poverty of certain social groups such as elderly, children, unemployed and rural. Conducted analyses allow to dispel some of the myths in this matter, as well as to bring out the characteristics that are particularly important from the perspective of creating the support instruments for groups that are at risk of poverty. The issue of poverty among children is scrutinised from the intergenerational perspective, and its determinants and possible measures of preventing the phenomenon are discussed. The third part focuses on relations between income inequalities and situation on the labour market. In this part changes in distribution of wages in Poland are confronted with the poverty dynamics. They are supplemented with a reflection on the impact on poverty exerted by changes in the Polish society, including (but not limited to) those concerning household structure or economic activity of women. The phenomenon of so called working poor is also scrutinised here. We determine, inter alia, whether the characteristics of household or of work performed are more important causes of in-work poverty. We also elaborate on the question if situation of poor households is persistent or low-paid employment enables them to get out of poverty. The fourth part discusses available tools and instruments to fight the poverty. The state of affairs described in first three parts allows to take a closer look on efficiency and effectiveness of social policy measures applied in Poland, both tax and benefit based. Special attention is drawn to the issue of financial support of families with children as an element of social and demographic policy. The key features of this part are simulations of the impact of hypothetical changes in currently functioning system on rate of poverty in Poland. The recommendations for public policy constitute the summary of the report.
    Keywords: Poverty, in-work poverty, earnings inequality, income inequality, tax and benefit policies
    JEL: I32 I38 J01 J31 J62 J68
    Date: 2013
  14. By: Szvetlana Acs; Oleksandra Borodina; Sergio Gomez y Paloma (European Commission – JRC - IPTS); Andriy Kharchenko (European Commission – JRC - IPTS)
    Abstract: Ukraine is one of the few countries in the world that is in a position to significantly increase grain net exports, due to its strategic location and agro-ecological potential of its soils. The grain production potential of Ukraine depends on the two main factors: land area cultivated and yield. This report analyses possibility of increasing both of these factors, highlighting the unstable character of land area under grain and defining the causes of such fluctuations including extreme weather conditions, absence of crop insurance system, lack of environmental measures and unsustainable mid- and long-term state policy in grain production and trade. The rapid emergency of large intensive agricultural enterprises and agro-holdings in the last decade is widely promoted by policy makers due to their effectiveness; however in terms of operational efficiency, environmental footprint and monetary productivity, peasant farms often have better results, as we have shown in this report. In terms of economic and institutional challenges, we have analysed issues with logistics and trade infrastructure, rule of law, transparency of grain markets and financial support to the farmers. As a result of the analysis, we can conclude that by liberalizing its markets, improving the rule of law and providing more state support for sustainable agricultural practices and infrastructure development, Ukraine shall be able to increase its grain production and exports, attract more investment into the sector and improve producer profitability.
    Keywords: Sustainable agriculture, Ukraine, food security, grain supply, rural development, European Development Cooperation.
    Date: 2013–10
  15. By: Valerija Botric (The Institute of Economics, Zagreb)
    Abstract: Information on the key sectors of an economy can have important policy implications. This paper identifies key sectors in Croatia based on the recently published input-output table for year 2004. Comparison of different methodological approaches used in the paper suggests that identified key sectors are most likely relevant only for the analyzed period (construction activity). Additionally, service sectors were often identified as important, and not export-oriented sectors.
    Keywords: input-output analysis, Croatia
    JEL: C67
    Date: 2013–10
  16. By: Petrick, Martin
    Abstract: This article evaluates the recent evolution of farm structure in Kazakhstan's grain region against the reform objectives of the 1990s and the family farm theory that underpinned the latter. In the study region, super-large agroholdings, large-scale enterprises and smaller individual farms emerged side-by-side and now compete for resources in a homogenous production environment. Drawing on two survey rounds of farm-level data, we find that the agroholdings display the highest factor productivity and are the most competitive on land and labour markets among all farms. However, we also find constant technical returns to scale across farm types and a layer of smaller family farms that is highly competitive on land markets. It is thus too early to conclude that large corporate farms are economically superior to individual (family) farms. But the present analysis clearly calls into question that family farms are a per-se desirable or even the only viable way of organising agricultural production. A revision of the received family farm theory may thus be due. -- Dieser Aufsatz untersucht die Entwicklung der Betriebsstrukturen in Kasachstans Getreideregion im Lichte der Reformziele der 1990er Jahre und der Theorie des landwirtschaftlichen Familienbetriebs, die diese Ziele untermauerte. In dieser Region entstanden riesige Agroholdings, landwirtschaftliche Großbetriebe und bäuerliche Einzelwirtschaften nebeneinander. In einer homogenen Produktionsumgebung stehen sie nun im Wettbewerb um Produktionsfaktoren. Basierend auf zwei Befragungsrunden ergeben unsere Analysen, dass unter allen Betriebsformen die Agroholdings die höchste Faktorproduktivität und die größte Wettbewerbsfähigkeit auf Boden- und Arbeitsmärkten aufweisen. Allerdings belegen die Untersuchungen auch konstante Skalenerträge und die Existenz einer Gruppe kleinerer Einzelbetriebe, die ebenfalls eine hohe Zahlungsbereitschaft für Boden haben. Es erscheint daher verfrüht zu schlussfolgern, dass die juristischen Personen den Einzelbetrieben wirtschaftlich überlegen sind. Jedoch stellt die vorliegende Analyse die Sichtweise in Frage, der zufolge Familienbetriebe eine an sich wünschenswerte oder sogar die einzig lebensfähige Form der Betriebsorganisation in der Landwirtschaft seien. Eine Überprüfung der Theorie des landwirtschaftlichen Familienbetriebs scheint daher angebracht.
    Keywords: family farms,agroholdings,land market,labour market,Kazakhstan
    JEL: O13 P32 Q12 Q15
    Date: 2013

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