|
on Transition Economics |
| By: | Nicolas Gavoille (Latvijas Banka) |
| Abstract: | This paper examines firm-level responses to the large trade shock induced by the 2022 Russian invasion of Ukraine and the ensuing European Union sanctions. Using detailed administrative data from Latvia - a small, open economy with strong pre-war trade ties with Russia - I document the heterogeneous effects of the shock across firms with varying degrees of exposure. Employing a machine learning-based approach to determine a set of impacted firms and a difference-in-differences local projection method, the analysis shows that firms with lower initial exposure to Russia are the most likely to sever trade ties. Only a small set of firms, the most exposed to Russian trade, suffered significant losses in turnover, employment, and profitability, despite some trade reorientation towards CIS countries. Mere exposure to Russia emerges as the primary determinant of these patterns, whereas sanctions targeting specific goods do not play a direct role. These findings contribute to the broader literature on economic sanctions and trade policy by providing micro-level evidence on the adjustment mechanisms of European firms in response to geopolitical disruptions. |
| Keywords: | Sanctions, Trade shock, Firm behavior, Adjustment margins |
| JEL: | F14 F16 F61 |
| Date: | 2025–05–14 |
| URL: | https://d.repec.org/n?u=RePEc:ltv:wpaper:202503 |
| By: | Jonas Jessen; Robin Jessen; Ewa Gałecka-Burdziak; Marek Góra; Jochen Kluve |
| Abstract: | We quantify micro and macro effects of changes in the potential benefit duration (PBD) in unemployment insurance. In Poland, the PBD is 12 months for the newly unemployed if the previous year's county unemployment rate is more than 150% of the national average, and 6 months otherwise. We exploit this cut-off using regression discontinuity estimates on registry data containing the universe of unemployed from 2005 to 2019. For those whose PBD is directly affected by the policy rule, benefit recipients younger than 50, a PBD increase from 6 to 12 months leads to 13 percent higher unemployment. A decomposition analysis reveals that 12 months after an increase in the PBD, only half of the increase in unemployment is due to the effect on search effort (the micro effect) while the other half is due to increased inflows into unemployment. The total effect on unemployment, which includes equilibrium effects, is entirely explained by the increase in unemployment of workers directly affected by the policy change. We find no evidence of spill-overs on two distinct groups of unemployed whose PBD is unchanged and no effect on measures of labour market tightness. |
| Keywords: | unemployment benefits, extended benefits, spell duration, separation rate, regression discontinuity. |
| JEL: | H55 J20 J65 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11849 |
| By: | Anttonen, Jetro; Lehmus, Markku |
| Abstract: | We investigate the macroeconomic effects of two recent major geopolitical events on the euro area economy, namely, the outbreak of the Israel-Hamas war and the Russian invasion of Ukraine. To take into account the heterogeneity of geopolitical events, we do not seek to identify a homogeneous geopolitical shock on which to base our causal inference, but construct event-specific combinations of jointly identified macroeconomic shocks instead. To this end, we employ a non-Gaussian structural vector autoregressive model that is statistically identified but also makes use of zero- and sign restrictions and illustrate how different sources of identifying information complement each other. Our results show that adverse geopolitical events may have either inflationary or deflationary effects on indirectly affected economies and that context dependence is required from the monetary authorities when assessing the importance of geopolitical shocks to achieving their price stability objectives. |
| Keywords: | structural vector autoregression, statistical identification, monetary policy, inflation, geopolitics |
| JEL: | C32 C54 F51 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bofrdp:317790 |
| By: | Thaler, Balázs |
| Abstract: | This study investigates the effectiveness of the National Hungarian Economic Society (NHES) in representing agricultural interests in late 19th-century Hungary. As Hungary's leading agricultural interest group, the NHES shifted its focus in 1879 toward representing sectoral interests, responding to increased international competition and tensions in international trade. By analysing parliamentary records and NHES publications, the study found that while the NHES actively lobbied for agricultural interests, it often struggled to achieve its objectives, particularly in high-profile cases. External factors, such as strong Austrian interests and limited state capacity of Hungary, contributed to these challenges. However, internal issues also hindered the organisation’s capacity for collective action. An analysis of NHES membership data revealed the organisation likely struggled to integrate a diverse membership, which included landholders and non-farmers with varied interests. Disproportionate representation, weak norm enforcement and favouritism in lobbying efforts further weakened the cohesion of the organisation. The NHES lacked a comprehensive strategy to counter free rider issues and foster greater cooperation among members. Consequently, both external constraints and internal fragmentation weakened the NHES’ ability to effectively represent the Hungarian agricultural sector. |
| JEL: | Q10 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127236 |
| By: | Tamilina, Larysa |
| Abstract: | This study examines the effects of the ongoing war on social trust within Ukrainian society. The key finding suggests that the conflict contributes to a decline in trust, primarily due to its various adverse impacts on individuals. Additionally, the war appears to undermine contextual resources essential for trust-building, thereby indirectly contributing to the erosion of social trust. |
| Keywords: | Social trust, War, Conflict, SEM, Ukraine. |
| JEL: | P0 Z10 |
| Date: | 2025–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124499 |
| By: | Akbulut-Yuksel, Mevlude (Dalhousie University); Aydemir, Abdurrahman B. (Sabanci University); Kirdar, Murat Güray (Koc University); Turan, Belgi (TOBB University of Economy and Technology) |
| Abstract: | This paper examines the horizontal transmission of gender norms using the forced migration of ethnic Turks from Bulgaria to Türkiye after the fall of the Iron Curtain as a natural experiment. Despite shared linguistic and religious ties, migrant women held more progressive gender norms and stronger labor market attachment than native Turkish women. Their arrival increased labor market participation among native women, particularly in male-dominated manufacturing, while men’s outcomes remained unchanged. Additionally, native women’s fertility declined, and middle school attainment rose, aligning with refugee women’s patterns. Exposure to progressive norms reshaped native women's roles in work and family life. |
| Keywords: | culture, horizontal transmission, social learning, migration |
| JEL: | J16 J15 J13 N45 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17871 |
| By: | Bianchini, Virginia |
| Abstract: | This paper examines the establishment of Trieste as a Free Territory after WW2. The existing literature covered its contested status between Yugoslavia and Italy, focusing on its socioeconomic, and geopolitical challenges. However, I adopt a unique approach examining correspondence letters between country leaders and internal reports to provide first-hand accounts of the negotiations and considerations of leaders from the United States, United Kingdom, Italy, France, and the U.S.S.R. The methodology involves a qualitative analysis of the correspondence letters to comprehend the decision-making process behind the creation of Trieste Free Territory. The findings reveal a consensus on establishing a unique currency the "Triestuno" and Bank of Issue for Trieste, which aimed to provide financial stability but faced challenges due to limited initial capital and dependency on external financial support. It then complements this with internal reports providing data on economic indicators such as budget allocations, balance of payments, labour, and wages. The budgetary analysis shows a balance between revenue and expenditure, with a potential surplus indicating cautious financial planning. Furthermore, the balance of payments reveals Trieste's dependence on international trade, particularly with neighbouring countries and the importance of the port and shipbuilding industry offers potential for economic growth. |
| JEL: | F50 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127146 |
| By: | Alexeev, Michael (Indiana University); Chernina, Yevgenia (New Uzbekistan University); Gimpelson, Vladimir (University of Wisconsin-Madison); Zinchenko, Darya (Higher School of Economics (HSE)) |
| Abstract: | We compare wage profiles for STEM-educated and non-STEM-educated individuals over their lifetimes. Using repeated cross-sectional data from Russia, we examine how the dynamics of these types of human capital are affected by technological developments, applying the Age-Period-Cohort decomposition to workers’ life cycle wage growth. Additionally, we account for heterogeneity in the impact of institutional quality on lifetime wage profiles. We show that STEM education is associated with flatter wage-experience profiles than non-STEM education, with the most pronounced differences observed among females. The cohort effect, apparently specific to the former Soviet-type economies, reveals itself in devaluing some types of older education, putting non-STEM cohorts educated during the Soviet period at a disadvantage relative to those with STEM education. Importantly, in the Russian case, the age/experience effects act in the direction opposite to the cohort effects, rendering the cross-sectional analysis somewhat misleading. Finally, wage-experience profiles for males with non-STEM education are steeper in regions with weak institutions than in regions with stronger institutions. |
| Keywords: | age-period-cohort decomposition, life-cycle wage growth, wage, human capital, STEM, Russia |
| JEL: | E24 J24 J31 O33 O43 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17875 |
| By: | Siwar Khelifa; Bruno Lanz; Marco Pecoraro |
| Abstract: | We exploit the 1990-2000 inflow of Yugoslav refugees to Geneva to examine two understudied yet policy-relevant integration mechanisms for refugee pupils: language support classes, provided prior to integration into regular classes, and sorting based on academic ability within regular classes. We find that a higher share of refugees in language support classes is associated with a lower probability of grade repetition for lower-achieving immigrant pupils of the same grade and school, but a higher probability for native pupils. Additionally, we find that grouping refugees with incumbents of similar academic ability improves the educational performance of higher-achieving incumbents and lower-achieving immigrants, while negatively affecting lower-achieving natives. Our findings offer novel insights into the trade-offs of refugee integration policies, emphasizing the need to balance support for refugee pupils with minimizing potential adverse effects on incumbent pupils. |
| Keywords: | Education, Refugees, Incumbent pupils, Peer effects |
| JEL: | H75 F22 I21 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:irn:wpaper:25-05 |