nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒02‒14
seven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Possible Russian Invasion of Ukraine, Scenarios for Sanctions, and Likely Economic Impact on Russia, Ukraine, and the EU By Vasily Astrov; Richard Grieveson; Artem Kochnev; Michael Landesmann; Olga Pindyuk
  2. Effectiveness of Covid-19 vaccination in Poland By Karol Madoñ; Piotr Lewandowski
  3. Skipping Out On The Check: Institutional Quality, Tax Evasion, And Individual Preferences For Social Policy By Israel Marques II
  4. The Adventist Children and Young People’s Perception of the Sabbath Day in Communist Romania By Ciprian Corneliu Ciurea
  5. Chasing the Shadow: the Evaluation of Unreported Wage Payments in Latvia By Konstantins Benkovskis; Ludmila Fadejeva
  6. Determinants of labour market flows in Slovakia By Jan Klacso; Eva Stulrajterova
  7. Does the reorganization of large agricultural farms decrease irrigation water availability? A case study of Tajikistan By Sharofiddinov Husniddin; Moinul Islam; Koji Kotani

  1. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Artem Kochnev (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: While the outcome of the current Ukraine crisis is highly uncertain, it seems likely that the West will impose sanctions on Russia. Applying a stylized VARX model on Russian quarterly time series, we find no statistically significant impact of sanctions on either Russian GDP or the FX rate. However, we find that Russia is extremely vulnerable to a reduction in the price or volume of its energy exports. Aside from energy, the most painful sanctions would include cutting Russian banks off from the SWIFT system and dollar markets, and bans on exports of high-tech goods to Russia. While Russia has become increasingly insulated from the dollar-based global system, and has built up substantial buffers which it can deploy in the case of sanctions, under an adverse scenario the state would have to make large-scale interventions to maintain economic and financial stability. The Ukrainian economy will also suffer, and will require major Western support to maintain macro-financial stability. Over the medium run, the current crisis will further isolate Russia economically, leading to a continuation of its very mediocre growth performance since 2014.
    Keywords: Ukraine, Russia, EU, US,sanctions, energy, CEE
    JEL: F51 E31
    Date: 2022–02
  2. By: Karol Madoñ; Piotr Lewandowski
    Abstract: COVID-19 vaccines have proven highly effective in protecting against serious disease and death. Yet despite their introduction, Poland’s COVID-19 mortality rate remains high. This results from Poland’s lower vaccination rate compared to other EU countries – especially among people aged 70 or more who are at the highest risk from COVID-19.Vaccinating people aged 70+ is a much more effective method of lowering COVID-19 mortality rates than vaccinating people of working age. Increasing vaccination rates in the former age group would noticeably lower COVID-19 mortality in Poland. However, this would require an intensification of support efforts on a local level, including providing the elderly with comprehensive assistance in the vaccination process.
    Keywords: covid-19, pandemic, vaccination
    Date: 2022–01
  3. By: Israel Marques II (National Research University Higher School of Economics)
    Abstract: Who supports social policy in settings where institutions are weak? Existing work on social policy preferences focuses on the developed world, where governments can credibly commit to policy, tax evasion is constrained, and governments are accountable. In this paper, I relax these assumptions. I argue that weak accountability under poor institutions allow government officials to expend less effort to collect social policy contributions, decreasing expected revenues.For most, this is akin to a dead-weight cost that saps support for redistribution. For those with a comparative advantage in tax evasion, however, this allows for free-riding on the contributions of others and decreases the costs of social policy. As institutional quality declines and tax evasion becomes easier, individuals with a comparative advantage in tax evasion should therefore be more likely to support redistribution. I test this argument using public opinion data from a survey of 28,000 individuals in 28 post-communist countries.
    Keywords: Shadow Economy, Preferences for Redistribution, Public Opinion, Tax Evasion, Comparative Political Economy
    JEL: O15 H53
    Date: 2022
  4. By: Ciprian Corneliu Ciurea (Aurel Vlaicu University, Arad, Romania)
    Abstract: During the communist period, Romanian authorities faced a problem specific to the Adventist Church - the Adventist children did not attend school on Saturdays. Although they used the most varied methods of persuasion and coercion of children and parents to solve this problem, the authorities have not managed to fully defeat their resistance. This was the "big Adventist problem" that caused serious problems both to the Department of Cults and to the Securitate bodies, the Ministry of Education, the County School Inspectorates, the organizations of pioneers and youth, and the schools.
    Keywords: church, Adventists, pupils, students, communism, repressive measures, Saturday
    Date: 2021–08
  5. By: Konstantins Benkovskis (Latvijas Banka, Stockholm School of Economics in Riga); Ludmila Fadejeva (Latvijas Banka)
    Abstract: We develop a novel way to evaluate the size of unreported wage payments at employee level. It is only the reported employer-employee income data combined with firm-level financial statements and survey information on various person-level indicators that are required for this purpose. We estimate the Mincer earning regression by the Stochastic Frontier Analysis approach, proxying the unreported wage payments by the non-negative inefficiency term. Our methodology is tested on the Latvian data: we find that small and young firms engage in illegal wage payments more than other firms. Unofficial payments to employees with small reported wages are more frequent and sizeable, revealing lower wage income inequality in Latvia when the unreported wage is taken into account.
    Keywords: unreported wage, tax evasion, Mincer earning regression, income distribution
    JEL: E26 H26 J08 J31
    Date: 2022–02–09
  6. By: Jan Klacso (National Bank of Slovakia); Eva Stulrajterova (National Bank of Slovakia)
    Abstract: In this paper, we analyse labour market flows based on data from the Labour Force Survey. This survey enables us to analyse the impact of socio-demographic characteristics on flows between employed, unemployed and inactive stage. Our analysis is based on the period 2005Q1 – 2020Q1 and, also separately on the crises period 2009 – 2010. Education, marital status, or the number of years in the current job are the main factors impacting the flows in case of employed. The higher the educational level and the longer employed, the lower the probability of becoming unemployed. Also, married persons and persons working full-time have lower probability to become unemployed. In case of unemployed or inactive persons, the level of education is also an important factor, as the higher the education the higher the probability of finding a job. Estimation results for the crises years are in general qualitatively similar to results for the whole period. It is mainly the impact of educational level that changes. In case of employed persons, tertiary education significantly increases the probability of remaining employed during crisis times compared to at most secondary education.
    JEL: J64 J24
    Date: 2021–12
  7. By: Sharofiddinov Husniddin (International Fund for saving the Aral Sean, Republic of Tajikistan); Moinul Islam (Research Institute for Future Design, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology)
    Abstract: Irrigation water unavailability has become one of the long term problems in Tajikistan. In the post-Soviet period, Tajikistan government started reforming agricultural land for the efficient management. The reallocation was initiated by administrative boundary changes to facilitate the growing number of farmers and ensure crop diversity. However, the modernization of the irrigation water infrastructure did not take place simultaneously. This study identifies agricultural land reform’s impact on the irrigation water demand and supply of Sugd province of Tajikistan. We conduct the panel regression analysis by utilizing the data from 1996 to 2020 of the 13 states in Sugd province. We identify the impact of the number of water users, irrigation area type and water payment system on the irrigation water demand. Our results show that to deal with the changing demand of water in Tajikistan, irrigation systems need to modernize for gravity and pump irrigated areas. The payment system for irrigation water also deserves attention for the compatibility with the increasing irrigation water demand of Tajikistan. We also identify that irrigation water supply is impacted by the number of increasing water users. The possible solution to deal with the water supply shortage in Tajikistan is to eradicate system loss, introduce irrigation water rationing, improve water supply networks and update the Soviet period water pumps.
    Keywords: Irrigation water, water users, pump irrigation, gravity irrigation, payment for water services
    Date: 2022–02

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