nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒11‒13
eleven papers chosen by
J. David Brown
United States Census Bureau

  1. The importance of institutional and organizational characteristics for the use of fixed-term and agency work contracts in Russia By Smirnych, L. I.; Wörgötter, Andreas
  2. Labour Shortages Driving Economic Growth? By Vasily Astrov; Serkan Çiçek; Rumen Dobrinsky; Vladimir Gligorov; Doris Hanzl-Weiss; Peter Havlik; Mario Holzner; Gabor Hunya; Michael Landesmann; Sebastian Leitner; Isilda Mara; Olga Pindyuk; Leon Podkaminer; Oliver Reiter; Sandor Richter; Robert Stehrer; Hermine Vidovic
  3. Globalization and school-work choices in an emerging economy: Vietnam By Ian Coxhead; Rashesh Shrestha
  4. Educational mismatches and earnings: are the graduates more penalized for being overeducated? By Leszek Wincenciak
  5. Does corruption matter for the environment? Panel evidence from China By Liao, Xianchun; Dogan, Eyup; Baek, Jungho
  6. Transplanting clean-tech paths from elsewhere: The emergence of the Chinese solar PV industry By Binz, Christian; Diaz Anadon, Laura
  7. Recent development in Venture Capital and Private Equity Investment in the Czech Republic By Bozena Kaderabkova; Ondrej Ptacek
  8. Affordable and reliable power for all in Vietnam progress report By Hoai-Son Nguyen; Minh Ha-Duong
  9. Fertility Restrictions and Life Cycle Outcomes: Evidence from the One Child Policy in China By Wei Huang
  10. Trade, Pollution and Mortality in China By Matilde Bombardini; Bingjing Li
  11. Maternal Education, Parental Investment and Non-Cognitive Characteristics in Rural China By Jessica Leight; Elaine M. Liu

  1. By: Smirnych, L. I.; Wörgötter, Andreas
    Abstract: Non-renewable fixed-term and agency work contracts are becoming more used instead of the traditional Russian model of open-ended employment. The authors examine the influence of institutional and organizational factors on the use of two forms of non-standard work contracts in Russia with data from a Survey covering 3313 enterprises for the years 2009 to 2011. Probit and Tobit regressions are used to test several hypotheses about the use of non-standard work contracts derived from the literature. The results indicate that state-owned and unionized enterprises are more likely to use fixed-term contracts; and a high level of perceived dismissal protection for permanent workers is positively associated with fixed-term contracts use. The incidence and intensity of fixed-term and agency work contracts are lower at enterprises with flexible wages. A significant impact of organizational factors is confirmed only for fixed-term contracts. Enterprises use less fixed-term contracts, if they have workers with tenure from 5 to 10 years and high job complexity.
    Keywords: fixed-term contracts,agency work,non-standard employment,labor flexibility,Russia
    JEL: J41 J21 J63 J23
    Date: 2016
  2. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Serkan Çiçek (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Isilda Mara (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Summary In most of the countries from Central, East and Southeast Europe (CESEE), the current virtuous circle of rising consumption and incomes is expected to continue at least in the near term, accompanied by solid GDP growth to the tune of some 3% p.a. Ongoing labour-market improvements and rising wages will continue to be the main growth driver throughout the region; they will be complemented by a recovery in fixed investments as new EU funds become available. The economies of Russia, other CIS countries (except Belarus) and the Ukraine are expected to bottom out, as the negative shocks of the past two years have already been largely absorbed. Turkey is heading for a ‘soft landing’. These are the main findings of the newly released medium-term macroeconomic forecast by the Vienna Institute for International Economic Studies (wiiw). Despite the sluggish external environment, economic growth remains fairly strong in the majority of CESEE countries; the economic dynamics in almost half of those countries have intensified over the current year compared to 2015. Growth in the EU Member States from Central and Eastern Europe (EU-CEE) has declined only modestly over the current year, mostly on account of temporary investment weaknesses. It remains 1.5 pp higher on average than in the euro area. In Turkey, economic dynamics were also very solid up until mid-2016, albeit accompanied by signs of ‘overheating’, while the CIS countries are experiencing a ‘bottoming out’. The main driver of growth throughout the CESEE region continues to be private consumption, underpinned by sharply rising wages and incomes as well as decreasing unemployment. The tightening of labour markets and the rising labour shortages are partly a consequence of sizeable outward migration over the past years, which has had a cumulative negative effect on labour supply. A number of countries have also introduced higher minimum wages, sometimes as part of a more general fiscal relaxation package. Inflationary pressures in most CESEE countries – with the exception of the CIS countries and Turkey – are almost non-existent, as solid wage growth has been largely offset by marked gains in labour productivity and a profit squeeze. The expansion of fixed investments, which were an important pillar of GDP growth in 2015, has largely run out of steam this year. In the EU-CEE region, the main reason for this lies in a temporary drop in EU transfers that, in previous years, used to be an important source of investments. EU funds disbursed under the previous 2007-2013 Multiannual Financial Framework (MFF) were absorbed in 2015 at the latest, whereas attracting new funds under the recently adopted 2014-2020 MFF will take time. At the same time, disregarding the ‘EU transfers effect’, the underlying dynamics of investments remain strong. The export dynamics in many CESEE countries have been better than those of imports, resulting in a positive contribution of net exports to GDP growth. In most EU-CEE countries and Serbia, this is largely a reflection of their ever-strengthening export base and further gains in competitiveness. However, in the CIS countries it is entirely due to the weakness of domestic demand which is still depressed following strong currency depreciations over the past two years. Credit expansion in the CESEE region remains rather modest no country, with the possible exception of Slovakia, is currently experiencing a credit boom. Other factors tend to be more important determinants of the demand for loans than interest rates, which in many CESEE countries are rather low. Going forward, this reduces the risk of ‘boom-and-bust’ developments that have characterised the trajectories of a number of CESEE countries in the run-up to and during the global financial crisis. Domestic demand in many CESEE economies is supported by fiscal policy relaxation, particularly in Romania and Ukraine. One reason for this may have been a decline in government borrowing costs. Furthermore, the general disenchantment with the practical results of ‘expansionary austerity’ pursued in the past has played a role as well. At the same time, in most Western Balkan countries and in the CIS, the fiscal stance tends to be either neutral or restrictive – and in the case of the CIS countries it is essentially pro-cyclical. The impact of the forthcoming Brexit on CESEE economies should be contained by those countries’ relatively low trade exposure to the UK economy. In the EU-CEE region, some 1.6% of GDP is accounted for by final demand from the UK, and that share is even lower in other CESEE countries. At the same time, from 2019 onwards the EU-CEE region potentially faces the prospects of much lower (by up to 20%) EU transfers once the UK – the second largest net contributor country to the EU budget after Germany – leaves the bloc. The migration flows from the EU-CEE region to the UK could fall by nearly half compared to the past two years even without any changes to the migration regime, as the UK will become less of a magnet for migrants.
    Keywords: CESEE, economic forecast, Europe, Central and East Europe, Southeast Europe, Western Balkans, new EU Member States, CIS, Russia, Ukraine, Kazakhstan, Turkey, growth divergence, external risks, macroeconomic imbalances, consumption-led growth, unemployment, inflation, competitiveness, public debt, private debt, current account
    JEL: C33 C50 E20 E29 F34 G01 G18 O52 O57 P24 P27 P33 P52
    Date: 2016–11
  3. By: Ian Coxhead; Rashesh Shrestha
    Abstract: This paper examines the effect of increased access to industrial jobs on educational attainment using data from the 2009 Vietnam Census of Population and Housing. Vietnam’s accession to the WTO, concluded in 2006, was the signal for a fourfold increase in foreign direct investment, primarily by firms seeking low-cost blue-collar labor for assembly and light manufacturing. We find that the district-level intensity of jobs in foreign-invested firms has a significant negative association with the likelihood that teenagers will be recorded as being in school, for urban males and females and (to a lesser extent) for rural females. High dropout rates in the hinterlands of booming industrial areas like Ho Chi Minh City are due in part to relatively easy access to industrial labor markets that offer almost no premium for learning acquired in high school. The decision to enter the labor force before completing high school will likely have long-term implications for the individuals themselves, and for aggregate economic growth since competitiveness in the global economy depends on sustained increases in labor productivity.
    Keywords: human capital, schooling, globalization, Vietnam
    JEL: I25 F63
    Date: 2016
  4. By: Leszek Wincenciak (Faculty of Economic Sciences, University of Warsaw)
    Abstract: This paper estimates an extended Mincer wage regression model with Heckman correction for non-random selection using LFS data for Poland for the second quarter of 2013. Significant wage penalties are found to overeducation status as well as positive wage premia for being undereducated, which confirms findings that are found in the literature for other countries. Using Duncan and Hoffman (1981) approach, we find significant positive returns to years of overschooling and negative for underschooling. Young participants of the labour market (graduates) are less penalized for being overeducated, which suggests their overeducation is not necessarily a manifestation of lower ability.
    Keywords: educational mismatch, overeducation, undereducation, wage premium, Poland
    JEL: J24 J31 J41
    Date: 2016
  5. By: Liao, Xianchun; Dogan, Eyup; Baek, Jungho
    Abstract: This paper examines the income-energy-SO2 emissions nexus by taking a corruption variable into account. To that end, the panel cointegration methods are applied to 29 Chinese provinces over 1999-2012. The authors' empirical evidence shows that an increase in the number of anticorruption cases tends to drive down SO2 emissions in China. It is also found that income growth appears to have a beneficial effect on decreasing SO2 emissions over the past two decades. Finally, energy consumption is found to increase SO2 emissions.
    Keywords: China,corruption,environment,EKC,panel,SO2
    JEL: C23 Q56
    Date: 2016
  6. By: Binz, Christian (CIRCLE, Lund University); Diaz Anadon, Laura (Harvard University)
    Abstract: New clean-tech industries emerge in increasingly complex spatial patterns that challenge existing explanations on industrial path creation. In particular, the case of latecomer regions quickly building up industries in fields that are unrelated to their previous industrial capabilities is not well understood in the literature. This paper aims to address this gap with an analytical framework that draws on technological innovation system and catching-up literatures to specify the place-specific and extra-regional system resources that firms in latecomer regions draw on in the industry formation process. An in-depth case study of the Chinese solar photovoltaics (PV) sector reveals an industry formation process that differs from existing models. Rather than depending on linkages with multinational companies, extensive policy support, or gradual recombination of pre-existing domestic capabilities, early industry formation in the Chinese solar PV sector emerged from path transplantation in a highly internationalized entrepreneurial project. Pioneering actors mobilized knowledge, markets, investment and technology legitimacy developing outside China and re-combined them with the country’s generic capabilities in export-oriented mass manufacturing. This implies that in some industries, globalization may enable a new model of industrial path creation based on bridging domestic resource gaps by directly mobilizing system resources emerging in the international networks of a global innovation system.
    Keywords: cleantech; path creation; technological innovation system; solar photovoltaics; China; transnational entrepreneurship
    JEL: F64 O33 Q55
    Date: 2016–11–05
  7. By: Bozena Kaderabkova (Faculty of Economics, University of Economics, Prague); Ondrej Ptacek (Faculty of Economics, University of Economics, Prague)
    Abstract: The paper analyses venture capital (VC) and private equity (PE) investment activity in the Czech Republic. Our earlier research has shown the development and comparison of Czech and European private equity and venture capital markets in 2007-2012 or 2007-2013 respectively. The aim of this paper is to enhance the time line with the 2014 and 2015 data and find out the differences in market development trends (if any). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
    Keywords: venture capital, asset management, private equity, financial markets, market failure, government failure
    JEL: G24
  8. By: Hoai-Son Nguyen (CleanED - Clean Energy and Sustainable Development Lab - USTH - Université des Sciences et des Technologies de Hanoi); Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - AgroParisTech - École des Ponts ParisTech (ENPC) - EHESS - École des hautes études en sciences sociales - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement)
    Abstract: This statistical report contribute facts and numbers on the state of access to electricity for all in Vietnam, based on large-scale surveys conducted in the time period 2008-2014. Its theoretical contribution to debates on energy poverty is to account for the human dimension by using an self-reported satisfaction indicator. Surveys asked people if respondents had enough electricity to meet their households needs. We find that in Vietnam, the problem of providing access to clean energy for all is largely solved for now. The fraction of households without access to electricity is below two percent. This represents in the order of a million people. And the fraction of households declaring unsatisfied electricity needs is below three percent. The median level of electricity usage in 2014 was 100 kWh per month per household. An overwhelming majority of households spend less than 6% of their income on electricity, but the effort level is increasing. Highlights In 2014, 97.7 % of households in Vietnam used grid electricity for lighting. In 2014, out of four Vietnamese households, one used less than 50 kWh per month, and another between 50 kWh and 100 kWh. In 2014, 95 % of Vietnamese households devote less than 6.2 % of income to electricity. Between 2010 and 2014, the share of income that Vietnamese households devote to electricity increased by about one third. In 2010, one out of four households in Vietnam declared that their electricity use was insufficient to meet their needs. That ratio dropped under 3 % in 2014. In 2014, half of the households in Vietnam who declared insufficient electricity used less than 22 kWh per month. In 2014, among households using less than 22 kWh per month, only one out of six declared that their needs were not met.
    Keywords: vietnam, electrification, energy poverty
    Date: 2016–10–19
  9. By: Wei Huang
    Abstract: I use the experience of China's One Child Policy to examine how fertility restrictions affect economic and social outcomes over the lifetime. The One Child Policy imposed a birth quota and heavy penalties for ?out-of-plan? births. Using variation in the fertility penalties across provinces over time, I examine how fertility restrictions imposed early in the lives of individuals affected their educational attainment, marriage and fertility decisions, and later life economic outcomes. Exposure to stricter fertility restrictions when young leads to higher education, more white-collar jobs, delayed marriage, and lower fertility. Further consequences include lower rates of residing with the elderly, higher household income, consumption, and saving. Finally, exposure to stricter fertility restrictions in early life increases later life female empowerment as measured by an increase in the fraction of households headed by women, female-oriented consumption, and gender-equal opinions. Overall, fertility restrictions imposed when people are young have powerful effects throughout the life cycle. (JEL classification: H70, I20, J00, O12)
    Date: 2016–01
  10. By: Matilde Bombardini; Bingjing Li
    Abstract: Has the expansion in exports affected pollution and health outcomes across different prefectures in China in the two decades between 1990 and 2010? We exploit variation in the initial industrial composition to gauge the effect of export expansion due to the decline in tariffs faced by Chinese exporters. We construct two export shocks at the prefecture level: (i) PollutionExportShock represents the pollution content of export expansion and is measured in pounds of pollutants per worker; (ii) ExportShock measures export expansion in dollars per worker. The two measures differ because prefectures specialize in different products: while two prefectures may experience the same shock in dollar terms, the one specializing in the dirty sector has a larger PollutionExportShock. We instrument export shocks using the change in tariffs faced by Chinese producers exporting to the rest of the world. We find that the pollution content of export affected pollution and mortality. A one standard deviation increase in PollutionExportShock increases infant mortality by 2.2 deaths per thousand live births, which is about 13% of the standard deviation of infant mortality change during the period. The dollar value of export expansion tends to reduce mortality, but is not always statistically significant. We show that the channel through which exports affect mortality is pollution concentration: a one standard deviation increase in PollutionExportShock increases SO2 concentration by 5.4 micrograms per cubic meter (the average is around 60). We find a negative, but insignificant effect on pollution of the dollar-value export shocks, a potential “technique” effect whereby higher income drives demand for clean environment. We find that only infant mortality related to cardio-respiratory conditions responds to exports shocks, while deaths due to accidents and other causes are not affected.
    JEL: F1 I1 Q53
    Date: 2016–11
  11. By: Jessica Leight (Williams College); Elaine M. Liu (University of Houston)
    Abstract: This paper evaluates the parental response to non-cognitive variation across siblings in Gansu province, China, employing a household xed e ects speci cation. The non-cognitive indices are de ned as the inverse of externalizing challenges (behavioral problems) and internalizing challenges (anxiety and withdrawal). The results suggest that there is signi cant heterogeneity with respect to maternal education; educated mothers compensate for di erences between their children, investing more in a child exhibiting greater non-cognitive de cits, while less educated mothers reinforce these di erences. Most importantly, there is evidence that these investments lead to the narrowing of non-cognitive de cits over time for children of more educated mothers.
    Keywords: non-cognitive characteristics, parental investment, intrahousehold allocation
    JEL: I24 O15 D13
    Date: 2016–08

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