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on Transition Economics |
| By: | Alali, Walid Y.; Alali, Haider |
| Abstract: | This paper examines the effects of the economic Russian Republic's sanctions on global trade, macroeconomic dynamics, and welfare losses by using a calibrated novel model of three groups sets of the global economy. These groups are Russia, the second imposing the sanctions (EU, UK and the United States) and the third group (Turkey, India and China Republic). We assume that each nation of the group has two spheres subject sanctioned, these are the gas and final necessary commodity product of consumer. We consider three different sanctions types: Financial, trade on Gas and trade sanctions on finished products or goods. We demonstrate that currency rate changes reflect the type of sanction and the direction of the consequent sectoral reallocation's within countries, rather than indicating the effectiveness of sanctions. Our welfare study shows that if the third nation group does not ratify the sanctions, the sanctioned country's welfare losses are greatly reduced, and the sanctioning country's welfare losses are increased, but the third country gains from not being associated with the sanctioning group nations. These results demonstrate the need for international sanction coordination but also its difficulties. |
| Keywords: | International coordination, Currency volatility, Economic growth, Reallocation, Welfare, Sanctions |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:280740&r=tra |
| By: | Nikolova, Milena (University of Groningen); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS)) |
| Abstract: | This paper studies the long-term consequences of communism on present-day freedom of expression values in two settings – East Germany and the states linked to the sphere of influence of the former USSR. Exploiting the natural experiment of German separation and later reunification, we show that living under communism has had lasting effects on free speech opinions. While free speech salience has increased for East and West Germans vis-à-vis other government goals, the convergence process has been slow. East Germans are still less likely to consider freedom of speech a key government priority compared to West Germans. Additionally, our analyses of secret police surveillance data from East Germany point to the fact that geographybased measures of community experiences of past political repression do not explain our findings. The same conclusion holds when we look at the setting of the former Soviet Union and we correlate proximity to Stalin's former labor camps in the Soviet Union with present-day freedom of speech values. At the same time, family experiences with political repression in Eastern Europe/the former Soviet Union exert a discernible influence on current values towards freedom of speech, likely due to a lasting impact stemming from such personal encounters. As such, our paper adds a nuanced contribution to the economics of free speech, suggesting that freedom of speech may be a part of informal institutions and slow-changing cultural values. |
| Keywords: | political repression, communism, free speech, German Democratic Republic, Eastern Europe, former Soviet Union, economic history |
| JEL: | D02 D83 N00 P27 P52 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16657&r=tra |
| By: | Costa-Font, Joan; García Hombrados, Jorge; Nicińska, Anna |
| Abstract: | This paper studies the effect of communist indoctrination in school on labour force participation and human capital investments. Specifically, we evaluate the impact of a reform in Poland that revoked political indoctrination in school in the mid-1950s, while leaving the rest of the curriculum unchanged. To overcome endogeneity concerns, we exploit cut-off birth dates for school enrolment that exhibit variation in the level of exposure to the reform. We find that a reduction in school indoctrination increased the probability of finishing secondary and tertiary education, and expanded labour force participation about 50 years down the line. |
| Keywords: | education systems; communist education; education reforms; school curriculum; later life outcomes; human capital attainment; labour market participation |
| JEL: | I28 |
| Date: | 2024–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:120407&r=tra |
| By: | Yuki Higuchi (Faculty of Economics, Sophia University, Japan); Vu Hoang Nam (Faculty of International Economics, Foreign Trade University, Viet Nam); Tetsushi Sonobe (Asian Development Bank Institute, Japan) |
| Abstract: | We conducted randomised experiments to provide management training for 312 small Vietnamese manufacturers in 2010 and repeatedly collected follow-up data in the span of a decade. Analysing panel data constructed from our original surveys with an attrition rate of 4%, we find that our training significantly improved the management quality of the treated entrepreneurs, and such improvement was sustained for at least 5 years. The control entrepreneurs, however, caught up in the longer run. |
| Keywords: | management training, Kaizen, small and medium-sized enterprises, RCT, Viet Nam. |
| JEL: | L2 M1 O1 |
| Date: | 2023–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2022-42&r=tra |
| By: | Bukowski, Pawel; Chrostek, Paweł; Novokmet, Filip; Skawiński, Marek |
| Abstract: | This paper combines micro-level tax data, household surveys and national accounts data to provide consistent series of income distribution in Poland over the 2000-2018 period. We find that inequalities in Poland are one of the largest in Europe. In 2018, the share of pretax and pre-transfer income accrued to the top 10% is 37.4%, to the next 40% is 41.1%, and to the bottom 50% is 21.5%. The top 1% earns 13.4% of the total income. The increase in income inequality during this period was largely driven by high business incomes in top income shares. The extent of redistribution in Poland is modest. The tax system is regressive at the top of the income distribution due to lower taxation of business income and the low burden of social contributions. Finally, we show that top income groups are dominated by business owners, males, and big city dwellers, and these groups have been the largest beneficiaries of Poland’s strong growth since 2000. Gender inequality has been high and stable in Poland, with a steeply decreasing female share with income rank (e.g. the share of females in top 0.1% group was 18% in 2018) . |
| JEL: | D31 H24 |
| Date: | 2023–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121036&r=tra |
| By: | Azzollini, Leo; Breen, Richard; Nolan, Brian |
| Abstract: | Changes in household structures and employment patterns alter the balance between households with an above- versus a below-average poverty risk while also affecting relative income poverty thresholds. Examining eleven countries for which suitable microdata is available from the Luxembourg Income Study (LIS) back to the mid-1980s shows that patterns of change in household composition and employment exhibited some common features but also very substantial variation. The share of single adult households rose in most countries, couples with no or only one person in paid work fell in most, while couple households with two earners increased in a majority but not in Denmark, Norway and the USA and only modestly in Hungary and the UK. A counterfactual exercise assessed the impact of these changes in composition on relative income poverty rates by reweighting the 2019 samples to impose the composition structure observed in 1986. In the absence of these composition changes the relative poverty rate in 2019 would have been a good deal higher in Germany, Greece, and Italy, and especially in Israel and Spain. Composition changes had only a modest impact in the UK and made very little difference in Denmark, Hungary, and the USA, while working to increase the relative poverty rate in Czechia and Norway. This reflected the varying scale and nature of the composition changes seen across these countries. Their impact included driving up the relative poverty threshold (except in the USA), and if this effect is discounted the composition shift over the period would have had a greater poverty reduction impact in most countries, especially in Israel, Italy and most powerfully in Spain. (Stone Center on Socio-Economic Inequality Working Paper) |
| Date: | 2023–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:rp37g&r=tra |
| By: | Marcin Rzeszutek (Faculty of Psychology, University of Warsaw, Poland); Jorgen Vitting Andersen (CNRS, Centre d'Economie de la Sorbonne); Adam Szyszka (Warsaw School of Economics, Collegium of World Economy, Warsaw, Poland); Szymon Talaga (The Robert Zajonc Institute for Social Studies, University of Warsaw, Poland) |
| Abstract: | This study aims at connecting the behavioral corporate finance (micro level) perspective and complexity theory along with agent-based modelling in order to analyze the impact of selected behavioral managerial factors on aggregated data related to the financial market stability (macro level). Specifically, we want to explore whether subjective well-being (SWB) of corporate managers (CEOs) impacted their business decisions during the Covid-19 pandemic, and how it may be related to volatility of stock prices and the issue of financial stability during this critical period. Our study is based on a survey of 255 managers of companies listed on the Warsaw Stock Exchange in Poland over the period . Using the results of this survey, we build an agent-based model (ABM) calibrated for the specific case of Poland to investigate how decision making of CEOs, stemming from their SWB, influence the stock prices and selected financial market dynamics indicators. The results of our study indicate that the excess volatility of stock prices may be a function of changes of SWB of managers, which in turn could lead to some crashes on the macro level with respect to financial stability |
| Keywords: | subjective well-being; CEO; Covid-19; agent-based model |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:23017&r=tra |
| By: | János Köllő (HUN-REN Centre for Economic and Regional Studies, IZA); Anna Sebők (HUN-REN Centre for Economic and Regional Studies) |
| Abstract: | In 2013, the Hungarian government cut the school leaving age from 18 to 16. We study the impact of this unique reform on the country's sizeable Roma minority using census data on the universe of 17-year-olds in 2011 and a 10 percent random sample in 2016. School attendance fell by more than 20 percentage points among Roma youth as opposed to less than 6 points with their non-Roma counterparts. Roma's post-reform drawbacks in school enrolment were predominantly explained by their family background, neighborhood characteristics, and, much less importantly, below-average school performance. Changes in local employment prospects had no remarkable impact on the post-reform ethnic gap. More stringent selection and self-selection by social status and school performance (rather than ethnicity) nevertheless affected the Roma minority disproportionally, with close to 30 percent of their 17-year-old children being out of education, training, and employment three years after the reform. |
| Keywords: | Keywords: school leaving age, Roma, Hungary |
| JEL: | I24 J15 J48 |
| Date: | 2023–11 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2331&r=tra |
| By: | Nizalova, Olena; Shepotylo, Oleksandr |
| Abstract: | This paper investigates the indirect economic impact of tuberculosis epidemic in one of the high-burden countries, focusing on the productivity at the individual level measured by the average wages and at firm level measured by the average total factor productivity (TFP). We use unique administrative data collected at the level of firms and regions for 2003-2009 and find that the ongoing tuberculosis (TB) epidemic has considerable indirect economic costs in terms of lost productivity and related inefficien- cies. First of all, both firms and individuals in regions with higher TB prevalence have significantly lower TFP and wages. Moreover, consistent with the Compensating Wage Differentials theory and after controlling for the TB prevalence, the risk of contracting the disease - TB incidence rate - is associated with higher wages and higher produc- tivity - a kind of premium for individuals and firms to operate in a risky environment. The latter can also be viewed as a source of inefficiency as this may prevent firms from entering more competitive markets. Additional analysis reveals strong spatial effects which are consistent with the infectious nature of the diseases and emphasize the im- portance of containing the epidemic. Overall, we estimate that a 10% decrease in the TB prevalence can lead to a 1.05% gain in GDP: 0.15% in terms of higher individual productivity and 0.89% in terms of firms' productivity. |
| Keywords: | Tuberculosis, Productivity, Regional Wage, Total Factor Productivity, TB Epidemic |
| JEL: | O18 I15 J24 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1360&r=tra |
| By: | Niftiyev, Ibrahim |
| Abstract: | The startup sector of Azerbaijan has developed rapidly and dynamically since 2014 and 2015, which should be considered a great success for the development of the non-oil industrial and service sector. However, systematic and in-depth studies on the performance of individual case studies have been neglected. Although this is understandable due to data constraints, limited access to businesses, and a non-liberal business environment, successful and failed startups should shed light on the most important aspects of growth management in the business sector. For this reason, this paper uses the in-depth interview method to collect data and analyze a specific case, namely “JoinB2B, ” a startup company based in Hungary and Azerbaijan that made a failed attempt to build a global business-to-business marketing communications platform. The findings show that former co-founders and former employees agree that there were communication problems, misrepresentation of management, and issues with full dedication to the startup. This hindered the organizational development and maturity of the company. In addition, the COVID-19 outbreak exacerbated persistent communication gaps and created a chaotic situation. Former employees stated that the platform was not sufficiently improved to have adequate technical capacity, that a professional team of employees was never formed, and that there were still persistent problems with timing and planning to establish a locally and globally recognized brand. Finally, business experts and economists cited lack of capital, internal management problems, overestimation of the startup’s ambitions, lack of a plan for business expansion and growth, and lack of state support and insufficient revenue raising as possible reasons for the closure. The study's findings are aimed at government agencies, research institutions, academics, and business experts, as academic research in this field is rare in Azerbaijan and should be encouraged. |
| Keywords: | Azerbaijan economy, business-to-business, case study, Hungary, marketing communications, startups |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esconf:280698&r=tra |
| By: | Miklós Koren (Central European University, Centre for Economic and Regional Studies, Centre for Economic and Policy Research, CESifo); Krisztina Orbán (Monash University) |
| Abstract: | Good management practices are important determinants of firm success. It is unclear, however, to what extent pro-management policies can shape aggregate outcomes. We use data on corporations and their top managers in Hungary during and after its post-communist transition to document a number of salient patterns. First, the number of managers is low under communism when most employment is in large conglomerates. After the transition to capitalism, the number of managers increased sharply. Second, economics and business degrees became more popular with capitalist transition. Third, newly entering managers tended to run smaller firms than incumbent managers. We build a dynamic equilibrium model to explain these facts. In the model, the number and average quality of managers react to schooling and career choice. We use the model to evaluate hypothetical policies aiming to improve aggregate productivity through management education and corporate liberalization. Our results suggest that variations in the supply of good managers are important to understand the success of management interventions. |
| Keywords: | Keywords: management, productivity |
| JEL: | E24 O15 O40 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2329&r=tra |
| By: | Tamás Hajdu (Centre for Economic and Regional Studies); Gábor Kertesi (Centre for Economic and Regional Studies); Bence Szabó (Centre for Economic and Regional Studies, Corvinus University of Budapest) |
| Abstract: | This study uses linked administrative data on live births, hospital stays, and census records for children born in Hungary between 2006 and 2011 to examine the relationship between poor housing quality and the health of newborns and children aged 1-2 years. We show that poor housing quality, defined as lack of access to basic sanitation and exposure to polluting heating, is not a negligible problem even in a high-income EU country like Hungary. This is particularly the case for disadvantaged children, 20-25% of whom live in extremely poorquality homes. Next, we provide evidence that poor housing quality is strongly associated with lower health at birth and a higher number of days spent in inpatient care at the age of 1-2 years. These results indicate that lack of access to basic sanitation, hygiene, and nonpolluting heating and their health impacts cannot be considered as the exclusive problem for low- and middle-income countries. In high-income countries, there is also a need for public policy programs that identify those affected by poor housing quality and offer them potential solutions to reduce the adverse effects on their health. |
| Keywords: | Keywords: health at birth, early childhood health, housing quality, basic sanitation, indoor air pollution |
| JEL: | I10 I14 J13 Q53 |
| Date: | 2023–09 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:2328&r=tra |
| By: | Hazans, Mihails (University of Latvia); Masso, Jaan (University of Tartu); Maurseth, Per Botolf (Norwegian Business School (BI)) |
| Abstract: | Do employees with supervisory responsibilities differ from other workers in terms of human values, especially those potentially affecting the quality and efficiency of supervision? This paper uses data from rounds 7-9 of the European Social Survey to examine the selection of employees into supervisory positions in nine Baltic Sea region countries, focusing on ten basic values and four higher order values identified by Schwarz (1992). In eight out of nine countries considered, statistically significant association with supervisory responsibilities is found for three higher order values: positive for Openness to Change and Self-Enhancement but negative for Conservation. By contrast, Self-Transcendence (covering Benevolence and Universalism) is not significantly associated with supervision. In Estonia, Finland, Denmark and (to a smaller extent) Norway and Germany, we find evidence for adverse selection into supervisory jobs based on the Power value posing a risk of autocratic behaviour. When looking at the link between the supervisor's values and the number of subordinates, we find that values that make it easier or harder to become a supervisor tend to work the same way in supervising more workers. |
| Keywords: | supervisory responsibilities, human values, adverse selection, social trust |
| JEL: | D91 J24 M51 P52 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16643&r=tra |
| By: | Köllő, János (Institute of Economics, Budapest); Boza, István (Central European University, Budapest); Ilyés, Virág (HUN-REN Centre for Economic and Regional Studies); Kőműves, Zsófia (Cambridge Economic Policy Associates); Mark, Lili Katalin (Central European University, Budapest) |
| Abstract: | We use linked employer-employee data to investigate a large sample of past and future prisoners in Hungary, 2003-2011. We first compare their jobs, focusing on attributes that can reduce the penalty the employer must pay for a mistaken hiring decision. Second, we study if employers insure themselves by paying lower wages to ex-prisoners. Third, we analyze whether the probability of the match dissolving within a few months is lower if the firm could potentially base its hiring decision on referrals. The composition of former prisoners' employment is biased toward easy-to-cancel jobs. In the unskilled jobs held by most of them, they do not earn less than future convicts, but a minority in white-collar positions are paid significantly less. Ex-prisoners' jobs are less likely to dissolve quickly if the hiring firm potentially had access to co-worker, employer, or labor office referrals. |
| Keywords: | incarceration, reintegration, mobility, discrimination, Hungary |
| JEL: | J71 J23 J63 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16645&r=tra |
| By: | Jonathan Créchet (Department of Economics, University of Ottawa, Ottawa, ON); Étienne Lalé (Department of Economics, York University); Linas Tarasonis (CEFER, Bank of Lithuania) |
| Abstract: | We propose new data moments to measure the role of life-cycle worker flows between employment, unemployment and out of the labor force in shaping cross-country differences in aggregate employment. We then show that a suitably extended version of the Diamond-Mortensen-Pissarides model can capture well these data moments. Two features of the model are crucial for this result: heterogeneity in match quality and endogenous search intensity. We examine the implications of this model for the sources of employment dispersion across Europe's largest countries, assessing the contribution of factors related to (i) the production technology, (ii) search, and (iii) policies. The sources of cross-country employment dispersion differ substantially across ages. Technology factors account for most of the employment variance of youths and prime-age workers, whereas search and policies are the main drivers of employment differences for older individuals. |
| Keywords: | Employment, Unemployment, Labor Force Participation, Life cycle, Worker Flows, Labor Market Institutions |
| JEL: | E02 E24 J21 J64 J82 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2306e&r=tra |