nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒03‒07
seven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Has EU accession boosted patents performance in the EU-13? -- A critical evaluation using causal impact analysis with Bayesian structural time-series models By Agnieszka Kleszcz; Krzysztof Rusek
  2. Rural Poverty Reduction and Economic Transformation in China: A Decomposition Approach By Lugo, Maria Ana; Niu, Chiyu; Yemtsov, Ruslan
  3. Understanding European Integration with Bipartite Networks of Comparative Advantage By Riccardo Di Clemente; Bal\'azs Lengyel; Lars F. Andersson; Rikard Eriksson
  4. Determinants of labour market exit of older workers in the Slovak Republic By Jakub Fodor; Oliver Roehn; Hyunjeong Hwang
  5. Female Labor Supply and International Trade By Gu, Ke; Stoyanov, Andrey
  6. How Distortive are Turnover Taxes? Evidence from Replacing Turnover Tax with VAT By Jing Xing; Katarzyna A. Bilicka; Xipei Hou
  7. Reducing Sexual-Orientation Discrimination: Experimental Evidence from Basic Information Treatments By Aksoy, Cevat Giray; Carpenter, Christopher S.; De Haas, Ralph; Dolls, Mathias; Windsteiger, Lisa

  1. By: Agnieszka Kleszcz; Krzysztof Rusek
    Abstract: Nowadays innovation is one of the main determinants of economic development. Patents are a key measure of innovation output, as patent indicators reflect the inventive performance of countries, technologies and firms. This paper provides new insights on the causal effects of the enlargement of the European Union (EU) by investigating the patents performance within the new EU member states (EU-13). The empirical results based on data collected from the OECD database from 1985-2017 and causal impact using a Bayesian structural time-series model (proposed by Google) point towards a conclusion that joining the EU has had a significant impact on patents performance in Romania, Estonia, Poland, Czech Republic, Croatia and Lithuania, although in the latter two countries the impact was negative. For the rest of the EU-13 countries there is no significant effect on patent performance. Whether the EU accession effect is significant or not, the EU-13 are far behind the EU-15 (countries which entered the EU before 2004) in terms of patent performance. The majority of patents (98.66\%) are assigned to the EU-15, with just 1.34\% of assignees belonging to the EU-13.
    Date: 2022–01
  2. By: Lugo, Maria Ana; Niu, Chiyu; Yemtsov, Ruslan
    Abstract: Rural poverty in China fell from 96 percent in 1980 to less than 1 percent of the population in 2019. Using PovcalNet data for China and a set of comparable countries, this paper estimates growth-poverty elasticities. It finds that China stands out for its record of sustained, fast growth, rather than because of an unusually high growth-poverty elasticity. In addition, changes in mean consumption, rather than changes in the distribution, drive poverty reduction. Furthermore, until 2010, changes in inequality attenuated the impact of growth on poverty. The paper also studies which channels mattered the most for rural poverty reduction by applying a decomposition framework to multiple rounds of Chinese Household Income Project surveys conducted in 1988, 1995, 2002, 2007, 2013, and 2018. The findings show that broad-based, labor-intensive growth in agriculture was initially the main driving force for rural poverty reduction, followed by the expansion of non-agriculture sectors. As the country’s poverty rate approached 10 percent by 2007, transfers from migrant workers and, later, public transfers became the major drivers of further rural poverty reduction. Throughout the period, the fall in the demographic dependency rate also played a significant role. As China’s living standards continue to rise, the official definition of poverty will have to adjust to the higher minimum. Continued structural transformation and the inclusive growth agenda retain crucial importance for sustained poverty reduction. (Stone Center on Socio-Economic Inequality Working Paper)
    Date: 2021–11–17
  3. By: Riccardo Di Clemente; Bal\'azs Lengyel; Lars F. Andersson; Rikard Eriksson
    Abstract: Core objectives of the European integration are convergence and economic growth, but these are challenged by competition and value chain asymmetries within the common market. A difficult challenge for the EU is how to harmonize specialization of industries and countries to reach global competitiveness, and at the same time bridge productivity differences across more and less developed countries. Here, we develop a novel bipartite network approach and trace pairwise co-specialization, by applying the widely used revealed comparative advantage (RCA) method, within and between EU15 and Central and Eastern European (CEE) member states from 2000. This new co-specialization approach can be used to assess redundancies and division in the system as a whole, and at the level of industries and countries as well. This latter feature enables us to investigate how co-specialization across countries impact economic growth. We find significant overlap of RCA among CEE countries but a diverging RCA structure between EU15 and CEE. Our econometric analysis indicates that productivity increases in those CEE industries that have co-specialized with other CEE countries after EU accession, while co-specialization across CEE and EU15 countries is less related to productivity growth. These results inform European policy that a division of sectoral specialization can lead to productivity convergence between EU15 and CEE member states.
    Date: 2022–02
  4. By: Jakub Fodor; Oliver Roehn; Hyunjeong Hwang
    Abstract: The Slovak population is set to age rapidly in the next decades, with significant impacts on economic growth and the sustainability of public finances. At the same time, the labour market exit age in Slovakia is among the lowest in the OECD. We use administrative data for Slovakia between 2013 and 2020 to analyse what factors influence the probability of employment exit of older workers. We find that statutory retirement ages have an important influence on the decision to leave employment. Higher educational attainment is associated with later employment exit, suggesting that the employment rate of older workers is likely to increase in the future as younger generations have higher educational attainment. We also find evidence that workers in sectors that are physically more demanding are exiting employment earlier. Impaired health also leads to significantly earlier employment exits. Finally living in a rural area or in areas with high unemployment is associated with earlier exit from the labour market.
    Keywords: ageing, labour supply, older workers, statutory retirement ages
    JEL: J21 J26
    Date: 2022–02–15
  5. By: Gu, Ke; Stoyanov, Andrey
    Abstract: We study the effect of spatial variation in female labor supply on international trade flows. We identify the set of gender-specific skills and argue that low female labor supply reduces the endowment of female-oriented skills and undermines comparative advantage in industries which use female labor intensively. We confirm this hypothesis using two different settings. First, we show that countries with low female labor supply, measured by female labor force participation, have comparative disadvantage in female-labor-intensive industries. To establish causality, we instrument female labor supply with cross-country differences in cultural values regarding the role of women in society. Second, we confirm the main hypothesis on trade data from Chinese regions. Using spatial variation in sex ratios resulting from the One Child Policy (OCP), we rely on the stringency of OCP as an exogenous female labor supply shifter. Other things equal, regions with higher female population share specialize in industries which use female labor intensively. We interpret our results as highlighting the importance of labor force gender composition for industry's productivity. Our results imply that the effect of gender imbalances in labor supply on labor market outcomes, observed in many parts of the world, can be mitigated through international trade by utilizing relatively abundant type of labor in export-oriented industries.
    Keywords: Female labor supply, comparative advantage, international trade, gender-dependent skills, China's one child policy, altered sex ratios
    JEL: F14 F16 J24
    Date: 2022–01–31
  6. By: Jing Xing; Katarzyna A. Bilicka; Xipei Hou
    Abstract: In this paper, we investigate distortions created by turnover taxes. As a natural experiment, we explore a reform that replaced turnover taxes with value-added taxes for some service industries in China, while the taxation of manufacturing industries remained unchanged. The reform increased sales, R&D investment, and employment for affected service firms, which is primarily driven by outsourcing from downstream manufacturing firms. We document that smaller and less innovative manufacturing firms outsource more, and reallocation increases the quality of innovation for affected service firms. Our study provides new evidence on the negative impact of turnover taxes imposed on business inputs.
    JEL: D25 H25 H32 O32
    Date: 2022–01
  7. By: Aksoy, Cevat Giray; Carpenter, Christopher S.; De Haas, Ralph; Dolls, Mathias; Windsteiger, Lisa
    Abstract: We study basic information treatments regarding sexual orientation using randomized experiments in three countries with strong and widespread anti-gay attitudes: Serbia, Turkey, and Ukraine. Participants who received information about the economic costs to society of sexual-orientation discrimination were significantly more likely than those in a control group to support equal employment opportunities based on sexual orientation. Information that the World Health Organization (WHO) does not regard homosexuality as a mental illness increased social acceptance of sexual minorities, but only for those who reported trust in the WHO. Our results have important implications for policy makers aiming to expand the rights of lesbian, gay, and bisexual people worldwide.
    Date: 2022–01–07

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