nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒04‒16
twelve papers chosen by
J. David Brown
United States Census Bureau

  1. Changing fortunes during economic transition: Low-wage persistence before and after German unification By Gürtzgen, Nicole; Nolte, André
  2. Impacts of Trade Liberalization on Dairy Industry in China By Ahmed, Wasim; Hussain, Safdar; Jafar, Rana Muhammad Sohail; Guang-Ju, Wang; Rabnawaz, Ambar; Saqib, Zulkaif Ahmed; JianZhou, Yang
  3. Intergenerational Income Mobility in Vietnam By Doan, Quang Hung; Nguyen, Ngoc Anh
  4. Subsidy Policies with Learning from Stochastic Experiences By Cai, Jing; de Janvry, Alain; Sadoulet, Elisabeth
  5. Risks of insolvency of households by regions By Yuri Danilov
  6. Environment, Energy and Environmental Productivity of Energy: A Decomposition Analysis in China and the US By Mohamad Taghvaee, Vahid; Hajiani, Parviz
  7. Openness and Urbanization: The Case of the People’s Republic of China By Lo, Chu-Ping
  8. Testing for Purchasing Power Parity for Selected CIS Countries Using the Sieve Bootstrap By Mehmet Fatih TraÅŸ; Esra Ballı; Çiler Sigeze
  9. Анализ условий внешней торговли России By Drobot, Elena; Kristina, Ilyasova
  10. The Unintended Long-term Consequences of Mao’s Mass Send-Down Movement: Marriage, Social Network, and Happiness By Shun Wang; Weina Zhou
  11. Key Determinants of Demand, Credit Underwriting, and Performance on Government-Insured Mortgage Loans in Russia By Lozinskaia Agata; Ozhegov Evgeniy
  12. The role of small-scale agriculture in Romanian context By Tudor, Monica Mihaela

  1. By: Gürtzgen, Nicole; Nolte, André
    Abstract: This paper studies whether the transition from a centrally planned to a market economy offers new perspectives for those who, in economic terms, were relatively deprived under the old regime. Previous empirical research on this question has been limited by the availability of representative longitudinal micro-data that track individuals' labour market careers across different political regimes. Our study seeks to fill this research gap by looking at the transition of Eastern Germany following German Unification. Using a unique large-scale German administrative data set, we measure individuals' relative economic position by exploiting information on whether individuals were in the bottom of the pre-unification wage distribution. We then address the question of how workers' low or high-wage status determines their wage and labour market status within and across different regimes. We document strong evidence of a dynamic selection process into low-wage employment after Unification. Furthermore, consistent with a weak connection between individuals' true productivity and their pre-unification low-wage status, the extent of across regime state dependence is found to be small in magnitude and appears to vanish over time. For males, the small extent of across regime dependence is found to be most pronounced among the medium and high-skilled, suggesting the depreciation of general human capital as a potential explanation.
    Keywords: Low Pay Dynamics,Economic Transition,State Dependence
    JEL: J31 J64 P21 C33 C35
    Date: 2016
  2. By: Ahmed, Wasim; Hussain, Safdar; Jafar, Rana Muhammad Sohail; Guang-Ju, Wang; Rabnawaz, Ambar; Saqib, Zulkaif Ahmed; JianZhou, Yang
    Abstract: The aim of this review to call attention towards the impacts of exchange liberalization on the dairy industry, and these impacts are vital concerning the monetary development of a country. The focus of this literature is on certain issues of proficiency and worldwide competitiveness of the dairy segment in an open economy environment. It identifies the sensational competition raise in the dairy sector affected by China's liberalization programs, via signing trade agreements with several countries across the globe, and the execution of the World Trade Organization (WTO) agreements. It gives an outline of the WTO Agreement on Agriculture and its impacts on the dairy part. So we have concentrated on specific parts of dairy, particularly production, demand and trade policies to empower dairy holders under the worldwide competitiveness and indicators like the local asset cost proportion. China dairy production was 36 million tons during 2010, however alarmingly declined up to 26.52 million tons in 2014. The production declined had driven towards import from out of the country, in this manner strategies and agreements require certain facilitations to meet local dairy items demands in China. The impacts of duties by developed nations to lessen taxes, local support and export subsidies have been insignificant and unless these nations fundamentally diminish the exchange distorting endorsements to their dairy segment it will be troublesome for China to contend with the global market.
    Keywords: Dairy production, Dairy trade
    JEL: F1 Q18
    Date: 2016
  3. By: Doan, Quang Hung; Nguyen, Ngoc Anh
    Abstract: This paper uses five waves of Vietnam Living Standard Survey (VHLSS) in 1992/1993, 1997/1998, 2002, 2010, and 2012 from General Statistics Office of Vietnam (GSO) to estimate income elasticity for Vietnam and contributes it to the growing of literature review on intergenerational mobility. The result of analysis, employing the two-sample two-stage least squares technique, shows that intergenerational income mobility is about 0.48 – 0.49 in Vietnam and it is one of the most mobility in developing countries. In terms of distribution income, the findings from transition matrix and two-sample instrumental variable quantile regression highlight that the bottom quintile has the lowest mobility, implying that opportunities for children in poor families escape the poverty being still fragile. Income mobility at top quintile, in addition, has increase over time. Finally, educational mobility at bottom and second groups has significant upper mobility and the top is “like father, like son”.
    Keywords: Intergenerational income mobility, Vietnam, Two-sample two-stage least squares (TS2TLS), transition matrix, quantile regression.
    JEL: J28 J6
    Date: 2016–02
  4. By: Cai, Jing; de Janvry, Alain; Sadoulet, Elisabeth
    Abstract: Many new products presumed to be privately beneficial to the poor have a high price elasticity of demand and ultimately zero take-up rate at market prices. This has led gov- ernments and donors to provide subsidies to increase the take-up, with the hope of reducing the subsidies once the value of the product is better known. In this study, we use data from a two-year field experiment in rural China to define the optimum subsidy scheme that can insure a given take-up for a new weather insurance product for rice producers. We estimate both reduced form causal channels and a structural model of learning from stochastic expe- rience which we use to conduct policy simulations. Results show that the optimum current subsidy necessary to achieve a desired level of take-up rate depends on both past subsidy levels and past payout rates, implying that subsidy levels should vary locally year-to-year.
    Keywords: Social and Behavioral Sciences, Subsidy, Insurance, Take-up, Stochastic Learning
    Date: 2016–04–11
  5. By: Yuri Danilov (Department of Economics, Lomonosov Moscow State University)
    Abstract: The article presents the results of applied economic research to assess the current level of risk of insolvency of households. Were selected indicators that can be calculated at the regional level in order to identify the most problematic regions of Russian Federation in terms of the level of risk of insolvency of households, conducted clarifying the methods of calculation of these indicators. The results are meaningful commented. Identified areas with the highest risk of insolvency of households. It is concluded that in the coming years overdue household debt indicators can reach dangerous level, in terms of social and political stability. Calculation results for each region of Russian Federation are listed in an application.
    Keywords: insolvency of households; the risk of insolvency; bankruptcy of persons; insolvency indicators; credit debt; arrears; gross regional product; economic security
    JEL: R19 R20 G21
    Date: 2016–04
  6. By: Mohamad Taghvaee, Vahid; Hajiani, Parviz
    Abstract: The global warming, if not global burning, is a dire warning about environmental pollution dangers to everyone, living on the only one Earth. This study aims to measure relative contributors to the environmental quality changes during 2002-2011 using Logarithmic Mean Divisia Index in China and the US. Since these countries are the biggest polluters in the world, the decomposition technique is used to cut their wide environmental issues into the tiny bits of problems, being easy to cope with. Moreover, we employed Environmental Performance Index (EPI) to evolve the concept of Environmental Productivity of Energy (EPE). The results suggest that economic growth and income equality are environmentally-friendly while energy consumption is environmentally-unfriendly; and the Environmental Productivity of Energy (EPE) and technology progress are environmentally-moody (with various effects on environment). Consequently, the policy makers are advised to develop those economic sectors which are independent of pollutant energies; to replace the black energies by the green ones; and to invest on the research about the products whose demand is price inelastic.
    Keywords: Environment, Energy, Productivity, Decomposition
    JEL: Q5
    Date: 2016
  7. By: Lo, Chu-Ping (Asian Development Bank Institute)
    Abstract: Urbanization usually occurs with structural transformation driven by a “push” from agricultural productivity growth and a “pull” from industrial productivity growth, and usually the former exceeds the latter. This paper presents a simple model to illustrate how the open policy in the People’s Republic of China (PRC) since 1979 reversed the pattern such that the “pull” effect dominated the “push” effect during the PRC’s structural transformation and urbanization. This model helps explain why the PRC, whose industrial productivity growth exceeds its agricultural productivity growth, has experienced a standard pattern of structural transformation. The paper also demonstrates how a developing country’s business services intensity increases with its urbanization.
    Keywords: urbanization; structural transformation; industrial productivity growth; People’s Republic of China
    JEL: L16 O14 O40
    Date: 2016–03–27
  8. By: Mehmet Fatih TraÅŸ (Çukurova University); Esra Ballı (Çukurova University); Çiler Sigeze (Çukurova University)
    Abstract: Purchasing power parity (PPP) is widely discussed theory to explain the determination of exchange rates. PPP implies a long-run relationship between the nominal exchange rate and the relative price levels. PPP holds in the long run once the real exchange rate is a stationary process. This study examines the validity of PPP for Commonwealth of Independent States (CIS) namely Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Russia and Ukraine for the period 1995M1-2015M11. In this study we perform stationary test on three bases. In the first place, we initiate conventional unit root tests such as ADF and KPSS. Secondly, we utilize unit root tests allowing for structural break. Last but not least, we use a sieve bootstrap unit root test to avoid possible discrepancies between the actual and nominal rejection probabilities in hypothesis testing of unit root. In conclusion unit root test results performed show that there is a large disagreement on the validity of PPP in CIS countries. Given the span and characteristics of the period which involves a significant break such as 1998 Russian economic crisis, we conclude that PPP holds for Armenia, Belarus, Kazakhstan and Kyrgyzstan, while it does not hold for Azerbaijan, Russia and Ukraine.
    Keywords: Purchasing Power Parity; Real Exchange Rate; Transition Economies
    JEL: C12 C15 F31
  9. By: Drobot, Elena; Kristina, Ilyasova
    Abstract: This paper work is devoted to the problems of Russian foreign trade conditions analysis, as well as identification of the key factors exerting impact on a foreign trade turnover of the country. The authors give an assessment to the level of openness of Russian economy, allocating three main indicators of openness (an export quota, an import quota and the foreign trade quota). On the basis of the carried-out analysis the authors draw a conclusion about necessity of diversification of Russian economy, and also about the importance of transition from export of raw materials to finished goods, as well as stimulation of import substitution.
    Keywords: foreign trade turnover, customs tariffs, import, import substitution, sanctions, export
    JEL: F10 F13 F15 F17
    Date: 2016–04–05
  10. By: Shun Wang (Korea Development Institute (KDI) School of Public Policy and Management, 263 Nansojeong-ro, Sejong, Korea); Weina Zhou (Department of Economics, Dalhousie University, 6214 University Avenue, Halifax, NS, Canada)
    Abstract: This paper uses the China General Social Survey (CGSS) 2003 to evaluate the long-term consequences of a forced migration, the state’s “send-down” movement (shang shan xia xiang, or up to the mountains, down to the villages) during the Chinese Cultural Revolution, on individuals’ nonmaterial well-being. The send-down program resettled over 16 million urban youths to the countryside to carry out hard manual labor over the years 1968-1978. Most of them were allowed to return to urban areas when the Cultural Revolution ended. We find that those who had the send-down experience have worse marriage outcome, lower-quality social network, and lower level of happiness than their non-send-down counterparts. The negative effects of the forced migration are robust against a detailed set of family backgrounds and personal characteristics.
    Keywords: Send-down movement, Forced migration, Marriage, Social network, Happiness
    JEL: I31 J12 J18 J61
    Date: 2016–04
  11. By: Lozinskaia Agata; Ozhegov Evgeniy
    Abstract: This research analyses the process of lending from Russian state-owned mortgage provider. Two-level lending and insurance of mortgage system lead to substantially higher default rates for insured loans. This means that underwriting incentives for regional operators of government mortgage loans perform poorly. We use loan-level data of issued mortgage by one regional government mortgage provided in order to understand the interdependence between underwriting, choice of contract terms including loan insurance by borrower and loan performance. We found an evidence of a difference in credit risk measures for insured and uninsured loans and interest income.
    JEL: C36 D12 R20
    Date: 2016–03–24
  12. By: Tudor, Monica Mihaela
    Abstract: In the last quarter of century (post-communist period after '89) in Romania, rural areas and small rural households were highly stable systems, providing social and economic security. Small-scale agriculture has become and continues to be the main supplier in rural labour market in the absence of other non-agricultural employment opportunities; achieve higher levels of economic performance compared to large farms by diversifying their production structure due to they have an important contribution to the national food security; food self-consumption, supported by small farms has an leverage effect against poverty. If the resilience means the ability of an individual, household, community, region or country to resist, to adapt, and quickly recover after a crisis, shock, change, the economic and social functions and roles assumed in the transition period by small Romanian rural households gives them the attributes of an resilient answer of the entire Romania to the post-communist changes and shocks.
    Keywords: rural areas, socio-economic changes, small agriculture, resilience, Romania
    JEL: D04 O12 Q12 R14
    Date: 2015–11–20

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