nep-tra New Economics Papers
on Transition Economics
Issue of 2023‒06‒19
eleven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Educational disparities in disability-free life expectancy across Europe: a focus on the East-West gaps from a gender perspective By Donata Stonkute; Angelo Lorenti; Jeroen Spijker
  2. Catching-up and Falling Behind: Russian Economic Growth, 1960s-1880s By Stephen Broadberry; Elena Korchmina
  3. What if she earns more? Gender norms, income inequality, and the division of housework. By Iga Magda; Ewa Cukrowska-Torzewska; Marta Palczyńska
  4. The Effects of Rising Prices on Corn Production in Western African Countries By Rogna, Marco
  5. How to Prevent Yellow Vests? Evaluating Preferences for a Carbon Tax with a Discrete Choice Experiment By Jakub Sokołowski; Piotr Lewandowski; Jan Frankowski
  6. Towards net zero in the Czech Republic By Urban Sila; Erik Frohm
  7. Does flexibility of biofuel mandates have the ability to mitigate price spikes? Modelling potential biofuel production reductions in the context of the recent invasion of Ukraine By Dyer, Richard; Davies, Grant
  8. Remittances and Social Safety Nets During COVID-19: Evidence From Georgia and the Kyrgyz Republic By Nordine Abidi; Mehdi Akhbari; Bashar Hlayhel; Sahra Sakha
  9. Effects of Government Interventions on Bank Performance By Sona Siva
  10. Better jobs and incomes in Bulgaria By Margit Molnar; Michael Abendschein; Zvezdelina Zhelyazkova
  11. Better together? The effect of VietGAP and PGS certification on farmers' welfare in Vietnam By Enthoven, Laura

  1. By: Donata Stonkute (Max Planck Institute for Demographic Research, Rostock, Germany); Angelo Lorenti (Max Planck Institute for Demographic Research, Rostock, Germany); Jeroen Spijker
    Abstract: Education plays a crucial role in shaping the health outcomes of adults. This study examines the relationship between educational attainment and health across Europe. Using data from the Survey of Health, Ageing and Retirement in Europe, we estimate educational inequalities in disability-free life expectancy (DFLE) by gender in seven Western European (2004-2019) and three Central and Eastern European (CEE) (2010-2019) countries. We exploit a novel approach that combines the Sullivan method and multivariate life tables to calculate DFLE using SHARE data. We find that educational differences in DFLE favoring the better-educated exist in both CEE and Western European countries, but also that the differences across countries are more pronounced among the low-educated. While the absolute gaps in DFLE between low- and high-educated individuals in CEE and Western European countries are similar, the educational disparities in DFLE impose a more significant burden on the CEE populations due to their overall lower life expectancy. Educational inequalities are larger among women than among men in CEE countries, while the results for Western European countries are mixed. Our findings further highlight the important role of the institutional context in mitigating or exacerbating educational inequalities in health.
    JEL: J1 Z0
    Date: 2023
  2. By: Stephen Broadberry; Elena Korchmina
    Abstract: This paper provides decadal estimates of GDP per capita for the Russian Empire from the 1690s to the 1880s. GDP per capita in the 1880s was barely 3 per cent higher than in the 1690s, but this was not the result of continuous stagnation. Rather, positive growth during the first half of the eighteenth century was followed by negative growth between the 1760s and 1800s and stagnation from the 1800s to the 1880s. The main driver of this variation in GDP per capita was the relationship between population and land, with land per capita increasing to the 1760s, then declining to the 1800s and staying stable during the nineteenth century. This suggests that serfdom may not have been as strong a barrier to eighteenth century growth as has often been suggested, nor its abolition in 1861 as significant for subsequent growth. Although large-scale industry grew more rapidly than the rest of the economy, particularly after Peter the Great’s reforms in the early eighteenth century, this had only a minor effect on the economy as a whole, as it was starting from a very low base and still only accounted for 10 per cent of GDP by the 1880s. Russian economic growth before the 1760s resulted in catching-up on northwest Europe, but this was followed by a period of relative decline, leaving mid-nineteenth century Russia further behind than at the beginning of the eighteenth century.
    Date: 2022–06–30
  3. By: Iga Magda; Ewa Cukrowska-Torzewska; Marta Palczyńska
    Abstract: Using data from “Generation and Gender Survey†for Poland, we study the relationship between women’s relative income within the household, as measured by the female share of total household income, and women’s involvement in housework. We find that households in which the woman contributes more to the total household income are more likely to share housework equally. We also find that individual gender norms matter both for women’s involvement in unpaid work at home and for the observed link between the female share of income and inequality between the partners in the division of housework. Women from less traditional households are found to be more likely to share housework equally. However, this negative relationship between the female share of household income and female involvement in housework is not observed among more traditional couples.
    Keywords: household income, income inequality, housework, gender norms
    JEL: D10 D13 D31 J12 J16 J22
    Date: 2023–04
  4. By: Rogna, Marco
    Abstract: The intensification of the Russo–Ukrainian war started in February 2022 with the Russian invasion of Ukraine has generated a dramatic increase in the price of several goods. In particular, energy, gas and oil have been the most interested by this spike in prices, followed by several agricultural commodities. Fertilizers, whose production is energy intensive and/or directly dependent from oil derivatives, have also experienced a sharp increase in prices. This has risen concerns for food insecure countries, particularly in Africa, since, besides a lower possibility to purchase food commodities on the international market, they will likely decrease their own production due to a lower utilization of fertilizers. Quantifying this potential decrease in agricultural production is important in order to fully assess their vulnerability in terms of food security. The present paper tries to accomplish this task by forecasting the change in maize production in 2022 and 2023 compared to 2021 in seven Western African countries. We find an overall decline in maize production of 10% circa in both years with a strong heterogeneity among countries. Trivial users of fertilizers, such as Niger, experience a very modest decline in production (less than 2%) whereas others, such as Benin and Togo, have a double digit decline: approximately 13% the former and 32% the latter.
    Keywords: Food Security and Poverty, Crop Production/Industries
    Date: 2023–03
  5. By: Jakub Sokołowski; Piotr Lewandowski; Jan Frankowski
    Abstract: Increasing climate policy ambitions create tensions in societies with low trust and social divisions, as shown by the Yellow Vests movement that successfully opposed a carbon tax in France. We study preferences for policies to achieve energy security and climate change mitigation goals in the context of the energy crisis caused by the Russian invasion of Ukraine. We conducted a discrete choice experiment on a representative sample of 10, 000 people in Poland, a country heavily dependent on fossil fuels. Using a willingness-to-pay approach, we find a strong aversion to a carbon tax that is only moderately alleviated by redistribution policies. Income and age matter for preferences regarding climate and energy. People with low incomes (bottom quartile) value achieving climate change (15%) and energy security (10%) goals less than the general population (17% and 14% willingness to pay, respectively). Younger people (aged 18-34) are willing to sacrifice more income to mitigate climate change than people aged 55 or more (28% vs. 12%) but are less willing to forego income (11% vs. 16%) to reduce fuel imports from Russia. Consequently, we quantify the heterogeneity of preferences regarding redistribution measures and evaluate their efficiency, providing an example of using discrete choice experiments to mitigate the risks of social tensions due to introducing a carbon tax.
    Keywords: carbon tax, redistribution, climate change, discrete choice experiment, willingness to pay
    JEL: H23 D74 Q41 Q54
    Date: 2023–04
  6. By: Urban Sila; Erik Frohm
    Abstract: The Czech economy is very carbon-intensive and has among the highest greenhouse gas emissions per unit of GDP in the OECD. Getting on the path towards net zero will require rapid emission reductions over the coming decades. Coal still makes up close to one third of the energy supply and the government has pledged to phase it out by 2033, which will require a swift expansion in the use of renewable energy sources as well as increased energy efficiency. This can be achieved by adopting a comprehensive policy package that includes widely applied carbon pricing, incentives to raise energy efficiency, spending on renewable energy and cutting red tape hindering green investments. Compensating policies and adjustment support will be essential to mitigate the socio-economic impacts of climate policies and to increase public support. Active labour market policies including higher spending on re-training for the unemployed is key to facilitate the green transition.
    Keywords: Climate policy, green investment, labour reallocation, redistribution
    JEL: Q43 Q48 Q52 Q55 R11
    Date: 2023–05–11
  7. By: Dyer, Richard; Davies, Grant
    Abstract: This paper looks at how reducing biofuel production by introducing flexibility to mandates can have a potentially mitigating effect on price spikes. In particular we look at the recent price spike caused by the invasion of Ukraine and the consequent impact on global agricultural impacts. We model scenarios of reduced biofuel use in a global agricultural market model to see the impact on prices of the major cereals and oilseeds. A modest reduction of 10% of the use of cereals in biofuels can have a significant impact on the magnitude of the price spike for cereals and in particular maize. The modelled price spike in maize is 37% smaller after a 10% reduction in biofuel production in G7 countries. Results for wheat and vegetable oils are smaller but still significant at 11% and 27% respectively. This modelling demonstrates the importance of biofuel mandates in global agricultural markets and consequently their impact on global food security.
    Keywords: Resource /Energy Economics and Policy, Demand and Price Analysis
    Date: 2023–03
  8. By: Nordine Abidi; Mehdi Akhbari; Bashar Hlayhel; Sahra Sakha
    Abstract: Remittance flows in emerging market and developing economies were surprisingly resilient during the COVID-19 crisis, providing much-needed income support for remittance-receiving households. However, households were impacted differently across income distributions. Using novel high-frequency household panel data for Georgia and the Kyrgyz Republic and a difference-in-differences approach, we find that as household income fell during the pandemic, remittance-receiving households were more affected than non-remittance-receiving households. Importantly, we find that the incomes of poor, remittance-receiving households in the Kyrgyz Republic were more adversely affected than their non-remittance-receiving counterparts. In contrast, in Georgia, affluent remittance-receiving households experienced more significant income declines than poor remittance-receiving households. This heterogeneous impact can largely be explained by variations in the effectiveness of social safety nets in the two countries. Our results have important policy implications. Although remittances remained resilient during the pandemic, they affected households differently. As such, policymakers should prioritize addressing gaps in social safety nets to support the most vulnerable.
    Keywords: COVID-19; Remittances; Central Asia
    Date: 2023–05–05
  9. By: Sona Siva (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)
    Abstract: This paper evaluates the effects of government bailout policies on bank performance in the EU banking sector. Using a unique dataset of government supports, I identify banks which received state support in years 2008-2014 and corresponding control group of banks. I apply difference-in-differences method and extend it by propensity score matching and inverse probability of weighting methods to account for non-randomness of a treatment. My results suggest that aided banks overtook non-aided ones in terms of lending activity in both, the EU Core and EU Periphery, but it was accompanied by increased non-performing loans ratio (NPL) in the EU Periphery. Finally, I show these results differ from the developments in the US. TARP recipients improved their capital adequacy compared to non-intervened banks and returned to pre-crisis level in terms of NPL and profitability.
    Keywords: bailout, financial crisis, bank performance
    JEL: G21 G28
    Date: 2023–06
  10. By: Margit Molnar; Michael Abendschein; Zvezdelina Zhelyazkova
    Abstract: The shrinking number of workers due to smaller young cohorts entering the labour market and large-scale outward migration are undermining Bulgaria’s growth prospects, the sustainability of its social institutions and society more widely. Bulgaria needs to provide more support for families and make staying in the country more attractive by raising productivity, fostering the creation of more good-quality formal jobs and reinforcing the social safety net. Bulgarian women have high activity rates, a high share in management jobs and a low wage gap with men, but all this translates into high opportunity costs for educated women of having children. Policies, including access to affordable quality childcare countrywide, more egalitarian burden sharing with men and greater incentives to get back to work, would help reduce those costs. Women from disadvantaged backgrounds should be offered a career path through upgrading skills and lifelong learning. Inactivity rates among the working age population should be addressed by reforms to the social welfare system that would improve activation and through targeted measures. Vulnerable groups, including ethnic minorities, are disadvantaged in multiple ways and need tailored measures to escape poverty, acquire skills and integrate into the labour market.
    Keywords: Bulgaria, childcare, demographics, ethnic minorities, fertility, incomes, informality, jobs, labour market policies, migration, skills, social assistance, social insurance
    JEL: F22 J11 J13 J14 J15 J16 J21 J24 J46 J82 R23
    Date: 2023–05–26
  11. By: Enthoven, Laura
    Abstract: To promote sustainable agriculture in low- and middle-income countries, local certification schemes, including participatory guarantee systems (PGS) have been promoted as inclusive mechanisms. In this study, we investigate the implications of two local certification schemes for farmers in Vietnam: VietGAP, a simplified version of GlobalGAP certified by a third-party body, and PGS, based on sustainable agricultural practices controlled internally by farmers and other local stakeholders. We use farm-household data from a two-round panel survey conducted in 2018 and 2022 among 301 vegetable farmers. First, we investigate factors that may affect farmers’ adoption of the two schemes. Second, we estimate correlated random effects models to evaluate the schemes’ effect on farmers’ welfare while accounting for unobserved timeconstant factors. We do not find significant evidence that either certification scheme has an effect on household revenues and income from vegetables. However, we report negative costs and price effects, but positive market access effects linked to certification.
    Keywords: Research Methods/ Statistical Methods, International Development
    Date: 2023–03

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