nep-tra New Economics Papers
on Transition Economics
Issue of 2020‒12‒14
eleven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. What Citizenship for What Transition?: Contradictions, Ambivalence, and Promises in Post-Socialist Citizenship Education in Vietnam By , AISDL
  2. The Impact of Minimum Wages on Wages, Wage Spillovers, and Employment in China: Evidence from Longitudinal Individual-Level Data By Fang, Tony; Gunderson, Morley; Lin, Carl
  3. Transforming informal work and livelihoods in China By Carl Shu-Ming Lin; Linxiang Ye; Wei Zhang
  4. Budget System in Poland: Challenges and Ongoing Reforms By Bartłomiej Wiczewski
  5. China ‒ Domestic Support for Agricultural Producers: One Policy, Multiple Parameters Imply Modest Discipline By Dukgeun Ahn; David Orden
  6. Towards Better Adequacy and Sustainability A Review of Pension Systems and Pension Reforms in Eastern Partnership Countries By Henrik Huitfeldt
  7. Current status and perspectives of the textile industry in Serbia By Bukvić, Rajko; Petrović, Dragan
  8. Social Disadvantage and Children's Nutritional Status in Rural-Urban Migrant Households By Lin, Carl; van der Meulen Rodgers, Yana
  9. Accounting for Chinese Exports By Loren Brandt; Kevin Lim
  10. Growing like China: Firm performance and global production line position By David Chor; Kalina Manova; Zhihong Yu
  11. Inventory investment and the choice of financing: Does financial development play a role? By Junhong Yang,; Alessandra Guariglia; Yuchao Peng; Yukun Shi

  1. By: , AISDL
    Abstract: In 1986, the Communist Party of Vietnam officially approved reform policies known as đổi mới (doi moi) which transformed the country from a centrally-planned to a market-oriented economy. Since then, as Vietnam has been integrating into the global economy, the transitional society has become more open and diverse. The transformations have apparently impacted the ways in which citizenship has been understood and practiced in Vietnam. This study specifically investigates changes in state visions of citizenship as reflected in educational discourses. In addition, it examines teachers’ interpretations of good citizenship and their experiences of teaching citizenship in Vietnam’s schools.
    Date: 2019–05–09
  2. By: Fang, Tony (Memorial University of Newfoundland); Gunderson, Morley (University of Toronto); Lin, Carl (Bucknell University)
    Abstract: We use the substantial variation in both the magnitude and frequency of minimum wage changes that have occurred in China since its new minimum wage regulations in 2004 to estimate their impact on wages, wage spillovers, and employment. We use county-level minimum wage data merged with individual-level longitudinal data from the Urban Household Survey for the period 2004–09, spanning the period after the new minimum wage regulations were put in place. Our results indicate that minimum wage increases raise the wages of otherwise low-wage workers by a little less than half (41%) of the minimum wage increases. Depending upon the specification, these wage effects also lead to a 2 to 4 percentage point reduction in the probability of being employed, with a 2.8 percentage point reduction being our preferred estimate. We also find statistically significant but very small wage spillovers for those whose wages are just above the new minimum wage, but they are effectively zero for those higher up in the wage distribution.
    Keywords: minimum wage, China, wages, employment, wage spillovers
    JEL: J38 J88
    Date: 2020–11
  3. By: Carl Shu-Ming Lin; Linxiang Ye; Wei Zhang
    Abstract: The informal sector has long been viewed as a locus of the disadvantaged, unskilled, and inexperienced workers in under-developed and developing economies. Workers in the informal sector, however, can learn skills and gain experience that could help them switch to better-paying jobs in the formal sector. But evidence of this is limited. China constitutes an important case study because it is the most populous country and has the largest labour force, consisting of over 290 million rural-to-urban migrants whose employment is mostly informal.
    Keywords: China, Informal sector, livelihoods, Earnings
    Date: 2020
  4. By: Bartłomiej Wiczewski
    Abstract: In recent years, amid solid economic growth and measures to increase tax collection, Poland significantly reduced its fiscal deficit and public debt. Simultaneously, the country implemented several policies that are likely to weigh on public finances in the future. In the medium and long term, Poland will face challenges resulting from the Covid-19 pandemic and high expenditure related to population ageing, switching its growth engine to more knowledge-based activities and tackling climate challenges. Given recent increases in tax collection, procyclicality of tax revenue and the recession caused by the pandemic, achieving further collection gains does not appear plausible. Thus, an efficient management of public expenditure is expected to be crucial for fiscal policy. The budget system plays a major role in this. The current budget system in Poland has not undergone a major reform for years. Its current setup may not always be conducive to an effective management and control of funds. Longer-term planning is not sufficient and value-adding tools, like spending reviews, are not an inherent part of the process. Also, external, independent oversight is not optimal. The authorities, recognising the scale of these issues, are reforming the budget system. They benefit from a technical support financed by the EU under the Structural Reform Support Programme. As the reform will involve nearly all general government units and entail a significant change of working methods, it needs to be spread over several years.
    Keywords: budget system, budget, reform, spending reviews, performance budgeting, public finances, budget system in Poland: challenges and ongoing reforms, Wiczewski.
    JEL: E62 H61 H68
    Date: 2020–11
  5. By: Dukgeun Ahn; David Orden
    Abstract: This paper assesses key issues in the dispute over the United States’ claim that for certain grains China exceeded its limits on domestic support under the Agreement on Agriculture (AoA) during 2012-2015. The panel first determined that the base years for the reference price in calculating China’s market price support were 1996-1998, rather than 1986-1988 as stipulated in the AoA, and that production in the geographic regions where the support programs operated, not the smaller quantities purchased at administered prices, constituted eligible production. The panel then found China exceeded its limits in each of the four years for wheat, Indica rice and Japonica rice. The possibility was left open that a government can determine eligible production by setting maximum purchases at support prices in its regulatory framework. China used this option to claim that its programs for 2020 implemented the recommendations and rulings of the DSB. We argue that use of outdated fixed external reference prices to measure the price gap, and defining eligible production by limits on purchases, distance calculation under the AoA from economic support measurement. The measurement issues compound the discord among Members over levels of agricultural support.
    Keywords: Agreement on Agriculture, WTO US-China dispute, market price support, fixed external reference price, eligible production, wheat, rice, India.
    JEL: F53 K33 Q17 Q18
    Date: 2020–11
  6. By: Henrik Huitfeldt
    Abstract: This discussion paper reviews the state of play of pension systems and recent reforms in the Eastern Partnership countries and discusses outstanding challenges and options for further reforms. Pension systems in the Eastern Partnership countries are confronted with changing demographics and an ageing population, decreasing formal employment, and a legacy from the Soviet Union with persistent features such as low statutory retirement ages and exemptions and privileges for many different categories of workers. This led to significant difficulties of the pension systems in the region to provide for adequacy of pension benefits and fiscal sustainability. Following the 2008 economic and financial crisis, discussions on more comprehensive pension reforms have gained renewed interest and some reforms have been launched. However, recent reforms have often only addressed parts of the challenges of the pension systems. The focus has been on improving the financial sustainability of the mandatory public pension schemes, often by raising the statutory retirement age. More comprehensive pension reforms, including structural reforms to broaden the base of contributors, would be needed to create sustainable systems with the ability to provide fair and adequate pensions to the old-age population.
    JEL: I31 I38 J11 J14
    Date: 2020–10
  7. By: Bukvić, Rajko; Petrović, Dragan
    Abstract: The paper considers the current status and development perspectives of the textile industry in Serbia. As one of the oldest industries in the world, textile industry in Serbia (and Yugoslavia) was very developed and carried a lot of importance in GDP creation, absorption of the unemployed workers (especially women), and exports income. Unfortunately, in the last decade of 20th and first decade of 21st century, the country was deindustrialized and its industry, especially textile, was devastated. Big enterprises, as the basis of this strong branch, were liquidated, so now this industry consists mainly of small firms, which are highly imports dependent. They are grouped in five zones (Central Serbia, Northern Serbia, Western Serbia, Eastern Serbia, and South-Western Serbia), with different production programs. The future development of textile industry in Serbia must be seen in the context of reindustrialization and balanced regional development. This must be carefully planned and implemented.
    Keywords: textile industry, Serbia, deindustrialization and reindustrialization, balanced regional development, economic zones
    JEL: L67 N64 O14 P27
    Date: 2020
  8. By: Lin, Carl (Bucknell University); van der Meulen Rodgers, Yana (Rutgers University)
    Abstract: This article uses an innovative rural-urban migrant survey to assess how social disadvantage is associated with children's nutritional status in migrant households. Measures of social disadvantage are based on China's hukou system of household registration (designed to limit domestic migration flows by denying urban public services to migrants with rural registrations) and on son preference (stemming in part from the strict one-child policy). Regression results indicate that a rural hukou status is negatively associated with children's weight-for-age Z-scores, even after controlling for household characteristics, and girl children exhibit poorer nutritional status than boys. Results from a quantile decomposition procedure confirm that left-behind children have lower nutritional scores than children who migrate with their parents, and the gaps are biggest at lower portions of the distribution.
    Keywords: migration, China, children, health, nutrition
    JEL: I10 J61
    Date: 2020–11
  9. By: Loren Brandt; Kevin Lim
    Abstract: Rapid growth in Chinese exporting has spurred extensive research across multiple fields of economics investigating its effects. Yet, the causes of this growth remain less well-understood. We quantify the drivers of Chinese exporting using a general equilibrium model, estimated with detailed trade and production data that capture rich heterogeneity across destinations, firm ownerships, production locations, and sectors. Both external (foreign demand) and internal factors (productivity, firm entry, imported input access) were important drivers of high export growth from 2000-2007. A slowdown in export growth post-2007 is largely attributable to the disappearance of internal drivers, reinforced by weakening external factors.
    Keywords: China, Exports, Imports, Trade, Productivity, WTO, Market Access
    JEL: F14 F47 O47 O53
    Date: 2020–11–28
  10. By: David Chor; Kalina Manova; Zhihong Yu
    Abstract: Global value chains have fundamentally transformed international trade and development in recent decades. We use matched firm-level customs and manufacturing survey data, together with Input-Output tables for China, to examine how Chinese firms position themselves in global production lines and how this evolves with productivity and performance over the firm lifecycle. We document a sharp rise in the upstreamness of imports, stable positioning of exports, and rapid expansion in production stages conducted in China over the 1992-2014 period, both in the aggregate and within firms over time. Firms span more stages as they grow more productive, bigger and more experienced. This is accompanied by a rise in input purchases, value added in production, and fixed cost levels and shares. It is also associated with higher profits though not with changing profit margins. We rationalize these patterns with a stylized model of the firm lifecycle with complementarity between the scale of production and the scope of stages performed.
    Keywords: Global value chains, production line position, upstreamness, firm heterogeneity, firm lifecycle, China.
    Date: 2020
  11. By: Junhong Yang,; Alessandra Guariglia; Yuchao Peng; Yukun Shi
    Abstract: Using a panel of 224,604 Chinese firms over the period 2004-2009, together with a set of unique city-level financial development data, we document a positive and significant association between both bank loans and trade credit and inventory investment. Furthermore, we find that in cities with relatively high (low) financial development, firms rely more on bank loans (trade credit) to finance their inventory investment. Finally, we show that the moderating effect played by financial development on the association between bank loans/trade credit and inventory investment is more pronounced for firms more likely to face financing constraints, namely privately-owned, small firms, with no political connections, located in coastal regions. Our results are robust to using a variety of different specifications and estimation methods.
    Keywords: Financing choice, Trade credit, Bank loans, Inventories, Financial development, Financing constraints
    Date: 2020

This nep-tra issue is ©2020 by Maksym Obrizan. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.