nep-tra New Economics Papers
on Transition Economics
Issue of 2021‒07‒12
eleven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Labor Migration in the European Union: The case of Central and Eastern Europe By Ondrej Schneider
  2. Monetary autonomy of CESEE countries and nominal convergence in EMU: a cointegration analysis with structural breaks By Léonore Raguideau-Hannotin
  3. Problems at Poland’s banks are threatening the economy By Stefan Kawalec
  4. Informal employment and wages in Poland By Jacek Liwinski
  5. Innovation policy and performance of Eastern European Countries By Foreman-Peck, James; Zhou, Peng
  6. Childcare and Maternal Employment: Evidence from Vietnam By Hai-Anh Dang; Masako Hiraga; Cuong Viet Nguyen
  7. Performance Evaluation of the Fruit and Vegetable Subsectors in the Azerbaijani Economy: A Combinatorial Analysis Using Regression and Principal Component Analysis By Niftiyev, Ibrahim
  8. Set-weighted games and their application to the cover problem By Vasily V. Gusev
  9. Covid-19 vaccine efficacy and Russian public support for anti-pandemic measures By Borisova, Ekaterina; Ivanov, Denis

  1. By: Ondrej Schneider (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: This paper examines migration trends in the European Union since the enlargements of 2004-2007, which brought 100 million citizens of eleven Central and Eastern European countries into the EU. We examine country- and regional-level data on migration trends and show how European integration depleted the labor force in new member countries. Several of them lost 10% of their population since 2006, most of it via negative net migration. In 2019, 18% of Romanians, 14% of Lithuanians, 13% Croats, and Bulgarians lived in another EU country. The quantitative analysis shows that migration contributed positively to regional convergence, as every percentage point of net migration increased GDP per capita by roughly 0.01% and reduced unemployment by 0.1-0.2 percentage points. Further analysis will be needed to disentangle aggregate migration effects to quantify its impact on regions that lose their population via migration.
    Keywords: migration, labor markets, convergence, European Union
    JEL: F22 F66 J61 O15 R11 R23
    Date: 2021–07
  2. By: Léonore Raguideau-Hannotin
    Abstract: This paper investigates the monetary autonomy of Central Eastern and South Eastern European countries with the Euro area. These countries are European Union Member States that have not adopted yet the Euro single currency. Despite high degree of convergence as measured by Maastricht criteria, four of them do no plan to enter the Euro area soon. We therefore assess monetary autonomy of these countries over the long run through the use of a multivariate cointegration methodology with structural breaks (Johansen et al., 2000). This methodology allows us to capture the multidimensional aspects of monetary autonomy in the context of nominal convergence in the Economic and Monetary Union, by including both domestic and Euro area variables into the system (policy rates, infation rates, exchange rate). It also enables us to exploit all information contained in the macroeconomic series of these countries, for which broken economic history translates into non-stationary time series with breaks. Our empirical results suggest that modelling structural breaks changes the number and/or nature of cointegrating relations between our variables compared to the standard error correction model without breaks. With this modelling, we find monetary policy spillover from the Euro area to Bulgaria, the Czech Republic, Hungary and Romania. The inclusion of Euro area inflation to our baseline model enriches the cointegrating relations for the Czech Republic and Bulgaria. Poland is found to be the most monetary-independent country of ourstudy across the various models estimated. On the other hand, Romania's monetary interdependence with Euro area is better modelled without taking into account any structural break.
    Keywords: Central Eastern and South Eastern European countries, Economic and Monetary Union, European Union, nominal convergence, monetary autonomy, structural breaks, cointegration, integration, CESEE, EU, EMU
    JEL: F31 F36 F42 P33
    Date: 2021
  3. By: Stefan Kawalec
    Abstract: The author points out that in the very near future, conditions will emerge in Poland which – as the experience of other countries shows – create a risk of reduced efficiency of credit allocation to business. Additionally, in Poland today, bank lending to companies is to a high degree being replaced by funds from state aid, which reduces the efficiency of allocation of external funds to companies (both loans and subsidies), as allocation of government subsidies is not usually based on efficiency. This decline in external financing allocation efficiency may slow, halt or even reverse the process, that has been uninterrupted for 28 years, of Poland’s convergence, i.e. the narrowing of the gap in living standards between Poland and the West.
    Keywords: banking sector, mortgages loans, credits, interest rates, Poland, CHF
    JEL: G21
    Date: 2021–06–22
  4. By: Jacek Liwinski
    Abstract: This paper tries to identify the wage gap between informal and formal workers and tests for the two-tier structure of the informal labour market in Poland. After controlling for observed heterogeneity, I find that on average informal workers earn less than formal workers, both in terms of monthly earnings and hourly wage.
    Keywords: informal workers, undeclared employment, wages, wage penalty, PSM
    JEL: J24 J31 J46
    Date: 2020
  5. By: Foreman-Peck, James (Cardiff Business School); Zhou, Peng (Cardiff Business School)
    Abstract: This paper shows that EU and national innovation subsidy policies stimulated Central and East-ern Europe Countries (CEEC) productivity in the years after their entry to the EU. However, the average effectiveness of national funding was higher for the Western control group coun-tries than for the CEEC sample. EU innovation subsidies partly compensated the CEEC for the greater innovation effectiveness and impact of western economies. Although they crowded out innovation projects or funding of local governments at the country level, the subsidies crowded in national and local projects at the firm level. Local/regional state innovation aid to enterprises encouraged no increase in labour productivity in all but one of sample CEEC countries. These impacts are assessed in a sequential structural econometric model estimated using Eurostat’s collection of Community Innovation Surveys covering the years 2006-2014.
    Keywords: innovation policy; European Union; R&D; subsidies
    JEL: L53 L21 H71 H25
    Date: 2021–07
  6. By: Hai-Anh Dang (World Bank); Masako Hiraga (World Bank); Cuong Viet Nguyen (Vietnam National University)
    Abstract: Little literature currently exists on the effects of childcare use on maternal labor market outcomes in a developing country context, and the few recent studies offer mixed results. We attempt to fill these gaps by analyzing several latest rounds of the Vietnam Household Living Standards Survey spanning the early to mid-2010s. Addressing endogeneity issues with a regression discontinuity estimator based on children’s birth months, we find sizable and positive effects of childcare on women’s own labor market outcomes and their household income and poverty status. The effects of childcare differ by women’s characteristics and are stronger for more educated women. These effects are also somewhat larger for younger children and areas with higher income levels. Furthermore, we also find that some positive effects last after two years.
    Keywords: gender equality, childcare, preschool, women’s empowerment, RDD, Vietnam
    JEL: H4 J1 J2 O1
    Date: 2021–06
  7. By: Niftiyev, Ibrahim
    Abstract: Azerbaijan has an oil-led economy, which according to the well-known resource curse and Dutch disease hypotheses decreases the role of non-oil tradable sectors. Nevertheless, the government has actively fostered the growth of non-oil tradable sectors as the export orientation of Azerbaijan is being leveraged by the recently adopted economic policies. However, performance evaluations at the subsectoral level remain rare. The present paper evaluates the performance of the fruit and vegetable subsectors in Azerbaijan from 1995 to 2020 based on multiple key indicators, such as production, profitability, and productivity via principle component analysis (PCA). The purpose of the study was to provide a comparison of two key subsectors in Azerbaijan that are strong candidates for non-oil tradable exports. The results revealed that the vegetable subsector outperformed the fruit subsector in terms of production and profitability from 1999 to 2014; however, it experienced a sharp decline from 2014 to 2015 (the period of the rapid commodity price downturns), which gives rise to the question of whether the extractive industry negatively affected the subsector. Compared to the vegetable subsector, production and profitability in the fruit subsector demonstrated a more stable upward trend. In addition, labor input in both subsectors decreased over time, indicating efficiency gains via new technology transfers and productivity enhancements. Ordinary Least Squares (OLS) results demonstrated a strong and statistically significant negative relationship between the performance of the vegetable subsector with the oil revenue boom period (2008-2015).
    Keywords: Azerbaijan economy,agriculture,subsectoral performance,egetable production,fruit production
    JEL: E01 C38 O13 Q11 Q18
    Date: 2021
  8. By: Vasily V. Gusev (National Research University Higher School of Economics)
    Abstract: The cover of a transport, social, or communication network is a computationally complex problem. To deal with it, this paper introduces a special class of simple games in which the set of minimal winning coalitions coincides with the set of least covers. A distinctive feature of such a game is that it has a weighted form, in which weights and quota are sets rather than real numbers. This game class is termed set-weighted games. A real-life network has a large number of least covers, therefore this paper develops methods for analyzing set-weighted games in which the weighted form is taken into account. The necessary and sufficient conditions for a simple game to be a set-weighted game were found. The vertex cover game (Gusev, 2020) was shown to belong to the set-weighted game class, and its weighted form was found. The set-weighted game class has proven to be closed under operations of union and intersection, which is not the case for weighted games. The sample object is the transport network of a district in Petrozavodsk, Russia. A method is suggested for efficiently deploying surveillance cameras at crossroads so that all transport network covers are taken into account.
    Keywords: simple games,set-weighted games,vertex covergame,cover problem,cooperative generating functions,power indexes
    JEL: C70 C71
    Date: 2021
  9. By: Borisova, Ekaterina; Ivanov, Denis
    Abstract: In this study, we use random assignment of vignettes that feature optimistic and pessimistic scenarios with respect to vaccine safety and efficacy on a sample of roughly 1,600 Russians in order to gauge public support for anti-pandemic measures under various scenarios. Negative information on vaccine safety and efficacy reduces support for the anti-pandemic measures among individuals who fear Covid-19 and were initially supportive of government restrictions. These individuals tend to be old, and therefore vulnerable to Covid-19, and politically active. This loss of support is strongest for economically costly measures such as banning of large gatherings and the shuttering of non-essential businesses. Mask-wearing, which involves only minor costs, finds broad acceptance. We interpret the reactions in light of adaptation, fatigue over Covid-19 restrictions, and fatalism. The political consequences of non-pharmaceutical measures to deal with a pandemic include loss of public support over time, erosion of trust in government, and political backlash.
    JEL: I12 I18 C93
    Date: 2021–07–05
  10. By: Ilona Pavlenkova; Luca Alfieri; Jaan Masso
    Abstract: This paper investigates how investments in automation-intensive goods affects the gender pay gap. The evidence on the effects of automation on the labour market is growing; however, little is known about the implications of automation for the gender pay gap. The data used in the paper are from a matched employer-employee dataset incorporating detailed information on firms, their imports, and employee-level data for Estonian manufacturing and services employers for 2006–2018. We define automation using the imports of intermediates embedding automation technologies. The effect of automation is estimated using simple Mincerian wage equations and the causality of the effect is validated using propensity score matching. We find that introducing automation enlarges the gender pay gap. The negative effect of importing automation-intensive goods for female employees is about two to four percentage points larger than for male employees. The propensity score matching confirms that the introduction of automation has a higher causal effect on the wages of male employees than female employees.
    Keywords: Automation, Technological change, Robotization, Gender pay gap
    Date: 2021
  11. By: Aleksandra Mikhaylova (National Research University Higher School of Economics); Roman Zvyagintsev (National Research University Higher School of Economics); Ìarina Pinskaya (MGIMO University); Lorin Anderson (University of South Carolina)
    Abstract: Our research is dedicated to identifying what allows schools operating in difficult social conditions to show good academic results. We answer this question through the conjugation of two theoretical frameworks: academic resilience and school effectiveness. We analyze several models of school effectiveness and compare resilient and struggling schools through them. The study uses a quantitative and qualitative mixed-methods design. Our main arguments are based on an analysis of interviews conducted with students, parents, teachers, and principals in different schools—3 resilient and 3 struggling. We conclude that the schools differ in the strategies they implement; the main problem facing struggling schools is not the lack of effective elements, but the presence of negative ones; in further studies of school effectiveness, it would be worth using an integrative model that combines both poles
    Keywords: school effectiveness, academic resilience, mixed-methods design, resilient school.
    JEL: Z
    Date: 2021

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