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on Transition Economics |
| By: | Anastasia, Giacomo (Columbia University); Boeri, Tito (Bocconi University); Zholud, Oleksandr (National Bank of Ukraine) |
| Abstract: | Wars disrupt labor markets, yet systematic evidence on how markets for labor services operate during conflicts is almost entirely absent. Ukraine is a rare exception: despite the full-scale Russian invasion, timely data on workers and vacancies, in both stocks and flows, remain available. We use these data to document one of the largest labor supply and reallocation shocks in recent history and to estimate the impact on job matching, showing how labor markets adapt under extreme stress. The labor force shrank by about one fourth, yet vacancy filling rates and matching efficiency declined modestly. Only along the frontline and in occupied regions there is evidence of labor market shutdowns. Wage flexibility, adaptability of recruitment policies of firms, and remote working help explain the resiliency of labor outcomes. Recovering longer-term human capital losses suffered by Ukraine will require a mix of tools going well beyond labor policies and should be a priority for the reconstruction phase. |
| Keywords: | labor supply shock, reallocation, vacancy filling rate, wartime economy |
| JEL: | J22 J23 J24 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18363 |
| By: | Ibadoghlu, Gubad |
| Abstract: | In response to Russia's full-scale invasion of Ukraine, the European Union has accelerated efforts to diversify its energy supply and reduce structural dependence on Russian gas. Within this strategy, Azerbaijan has emerged as a significant alternative supplier through the Southern Gas Corridor and the 2022 EU-Azerbaijan Memorandum of Understanding, which sets a target of increasing gas exports to 20 bcm annually by 2027. Azerbaijani pipeline gas deliveries to the EU rose from 8.2 bcm in 2021 to 12.8 bcm in 2025, elevating Azerbaijan to the position of the EU's fifth-largest external pipeline supplier. This expansion of energy cooperation has coincided with a pronounced deterioration in Azerbaijan's human rights environment. Since mid-2022, the number of political prisoners has increased substantially, while European institutions-including the European Parliament, the Parliamentary Assembly of the Council of Europe, and the European Court of Human Rights-have documented persistent violations of fundamental freedoms. The article examines the structural tension between the EU's energy security imperatives and its normative commitments to democracy, rule of law, and human rights. It advances the concept of an "authoritarian trade-off, " whereby strategic diversification objectives may inadvertently reinforce authoritarian governance in supplier states. The analysis argues that the absence of enforceable conditionality in EU-Azerbaijan energy agreements risks undermining the Union's normative credibility. It concludes that embedding transparency requirements, governance reforms, and human rights conditionality into future energy frameworks is essential for aligning the EU's strategic interests with its foundational values. |
| Keywords: | European Union, Azerbaijan, energy security, energy diversification, Southern Gas Corridor, pipeline gas, foreign policy, authoritarian governance, political repression, petrostate dynamics, human rights conditionality, transparency, rule of law, geopolitical energy strategy |
| JEL: | P16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:337500 |
| By: | Yana Rodgers; Joseph Zveglich; Khadija Ali; Hanna Xue |
| Abstract: | Demographics in Malaysia and Viet Nam are evolving rapidly, potentially disrupting traditional family support to older people. We estimate a set of Poisson random effects models with panel data from the Malaysia Ageing and Retirement Survey and the Viet Nam Aging Survey to analyze how living arrangements, marital status, and support from children influence the mental and physical health of older people. In Malaysia, having living children plays an important protective role for both mental and physical health, while living with a son appears to have a protective effect for physical health. Results are similar for Viet Nam, except older women, who are at greater risk of mental and physical health problems, appear to enjoy a greater protective effect for their mental health from a child living nearby than do men. Our analysis underscores the importance of social safety nets for the health of senior citizens living alone. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.20378 |
| By: | Maciej Albinowski |
| Abstract: | I investigate differences in the incidence of part-time employment between Central and Eastern European (CEE) countries that have joined the EU since 2004 and Western European countries. I estimate employees’ probabilities of working part time based on observable characteristics, including capital income and market hourly wages. While labour force structure and economic development help explain more than half of the East-West gap in voluntary part-time employment, the remaining unexplained gap amounts to 10.6 percentage points for women and 1.0 percentage point for men. I find that progressivity in personal income taxation is a significant predictor of voluntary part-time employment, but has a limited impact on the unexplained East-West gap, reducing it by 0.7 percentage points for women and by 0.3 percentage points for men. The perceived importance of work and leisure time also have predictive power overall, but these social values do not explain the East-West gap. Moreover, full-time employees in CEE countries do not report stronger preferences for part-time employment than their Western European counterparts, suggesting that differences in working hours norms may play a more important role than hours constraints imposed by firms. Finally, evidence from German reunification supports the view that informal institutions may play a more important role than formal institutions, as the unexplained East-West gap in voluntary part-time employment gradually narrowed over time. |
| Keywords: | Part-time employment, Labour supply, Working hours, Working hours norms |
| JEL: | J22 O52 P30 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:wpaper:wp012026 |
| By: | Avetisyan, Artur |
| Abstract: | Energy-sector challenges have shaped international relations since early history, making energy a key component of geopolitics. Understanding current global and regional energy and economic trends is therefore essential. Armenia, like many European Union countries, faces significant challenges in ensuring energy and economic security. Given its geographic position and self-sufficiency in electricity generation, alongside its growing export potential, Armenia can play an important role in regional energy security and stability. The country also has strong potential in renewable energy and is a regional leader in new renewables, though this potential has not yet been fully realized. Unsettled relations with Turkey and Azerbaijan, as well as infrastructure constraints with Georgia and Iran, limit Armenia's opportunities. Nevertheless, improving ties with European and Asian partners enhance Armenia's strategic role along the North-South axis. This article examines new development trends, reassesses challenges and opportunities, and evaluates Armenia's potential to act as a regional bridge for energy and economic cooperation. |
| Keywords: | Energy security, sustainability, mutually beneficial cooperation, South Caucasus, critical infrastructures, the North-South International Project, the Black Sea Electricity Cable project |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:opodis:337459 |
| By: | Natalie Ayers (Harvard University); Christopher Blair (Princeton University); Joseph Ruggiero (University of Virginia); Austin Wright (University of Chicago); Konstantin Sonin (University of Chicago) |
| Abstract: | When leaders face threats to their authority, escalating foreign conflict can help divert public attention away from domestic grievances. We develop a formal microfoundation for diversionary escalation rooted in a theory of regime change. Although the idea of diversionary escalation is classic, systematic quantitative evidence has been challenging to obtain. Using a new data set of 1.8 million conflict incidents, obtained from the Organization for Security and Co-operation in Europe’s (OSCE) Special Monitoring Mission to Ukraine in 2015–2022, we find evidence that the Russian government strategically employed proxy-initiated separatist violence in Eastern Ukraine to divert attention from domestic unrest and opposition-led protest. We also find a positive link between opposition protest and inflammatory anti-Ukrainian coverage in the Russian media, complementary to battlefield escalation. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-21 |
| By: | Ibadoghlu, Gubad; Askerov, Ali |
| Abstract: | This article analyzes the political economy of Azerbaijan-Russia relations during the deterioration of bilateral political relations in 2024-2025. It argues that the 2024-2025 conflict exposed the fragility of bilateral political relations and demonstrated how political tensions increasingly spill over into economic, societal, and cultural domains. Despite growing political tensions, Russia has continued, until recently, to serve as the principal anchor of integration for Azerbaijan's non-oil economy. An examination of macroeconomic indicators for 2017-2024 shows that the Russian Federation remains the largest destination for Azerbaijan's non-oil exports, its leading import partner, the primary source of formal remittance inflows from Azerbaijani labor migrants, and the largest source of inbound tourism. In this context, the article assesses the extent to which escalating political frictions since late 2024 have begun to affect economic relations, focusing on foreign trade, remittances, foreign direct investment (FDI), and tourism. It further evaluates the potential implications of these developments for Azerbaijan's economic stability, diversification strategy, and evolving geopolitical orientation. Beyond economic ties, the study also considers the consequences of the post-December 2024 escalation for security cooperation and humanitarian, scientific-technical, and cultural exchanges. The findings suggest that sustained political deterioration may gradually constrain bilateral economic interdependence, while simultaneously pushing Azerbaijan toward a cautious recalibration of its strategic alignments within an increasingly fragmented regional order. |
| Keywords: | Azerbaijan, Russia, Political Economy, Tourism, Remittances, Foreign Direct Investment (FDI), Non-Oil Exports, Finance, Logistic, Regional Integration, Political Relations, Security |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:337505 |
| By: | Radovanovic Nikola; Fabbri Emanuele (European Commission - JRC); Sanz Macarena; Predic Marina; Radovanovic Nikola; Fabbri Emanuele (European Commission - JRC) |
| Abstract: | This paper examines the effectiveness of Smart Specialisation strategies in addressing sustainability and competitiveness challenges in the Western Balkans, a region whose innovation performance is strongly tied to EU accession efforts. Emphasizing green and digital transitions as key drivers but also situating Smart Specialisation within the New European Innovation Agenda (NEIA), the Growth Plan for the Western Balkans, and their emphasis on building connected Regional Innovation Valleys (RIVs), it highlights the need for system-level innovation focused on inclusive growth. The involvement of local players and strategic resource allocation remain crucial for practical outcomes. Evidence shows progress in digital infrastructure and sectoral initiatives, yet persistent gaps in data availability, skills and regulatory frameworks hamper uptake. In addition to environmental considerations, the paper draws attention to ICT cooperation, sectoral knowledge and innovation systems and sustainability reporting alignment as critical enablers for resilient development. Strengthening regional cooperation and stakeholder trust emerges as the key to optimising Smart Specialisation strategies for sustainable, innovation-led growth in line with EU priorities |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc143970 |
| By: | Joanna Mazurkiewicz; Jakub Soko³owski; Bartosz Jusypenko |
| Abstract: | The report assesses Poland’s updated National Energy and Climate Plan by combining an analysis of energy and climate security risks with new evidence on public preferences regarding the transition. We relate four risk dimensions (geopolitical, affordability, reliability, and sustainability) to the NECP’s targets and measures. The analysis is complemented by a survey and a discrete choice experiment that identifies preferences over trade-offs involving climate impacts, fossil-fuel imports, and the distribution of transition costs and benefits. The results indicate that the key issue is not only raising target ambition, but also the trajectory, feasibility, and durability of implementation. Affordability is the most sensitive area: public acceptance of policy depends on cost resilience and perceived fairness. The findings also point to the need for a broader understanding of security that captures households’ exposure to price-volatility risk and helps explain public attitudes toward energy and climate policy. |
| Keywords: | NECP, energy security, energy affordability, social acceptance, energy transition, Poland |
| JEL: | Q48 Q58 H23 D78 C93 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:report:rr012026 |
| By: | Zoltan Bartha |
| Abstract: | This paper investigates the extent of political rent seeking in Hungary in the 2010s. Political capitalism--where powerful private interests influence public policy for private gain--creates opportunities for rent seeking that vary across sectors. The analysis is based on a theoretical model assuming rent seeking occurs in a three-stage process: changes in economic institutions granting regulatory privileges, which are enhanced by political-business networks; this leads to scarcities, and increased market power in certain markets; which then generates rents. To quantify this, the study evaluates Hungarian political capitalism by examining the impact of political decisions on firms' rents, analysing the profit trends of the 1, 000 largest Hungarian firms (selected annually by net sales) and comparing their mean profit share (earnings before tax) across two periods: 2008-2012 and 2019-2023. A significant increase in a sector's mean profit share was assumed to indicate increased rent seeking. Using Welch's two-sample t-tests, three sectors were identified as potentially experiencing increased rent seeking: agriculture, construction, and financial and insurance activities. Quantitative findings include a 320% increase in mean agricultural profit share (70% in mean ROA), a more than fivefold increase in construction mean profit share (mean ROA from 3.3% to 10.1%), and a more than 6.5 times increase in financial sector mean profit share. Furthermore, a similar Czech analysis showed no significant increases in any sector's profit share, suggesting that the detected rises in Hungarian sectors are linked to domestic activities rather than external factors, which strengthens the findings. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.19100 |
| By: | Alicia H. Dang (Department of Economics, Union College); Joyce P. Jacobsen (Department of Economics, Hobart and William Smith Colleges, and Wesleyan University); Sooyoung A. Lee (Department of Economics, Hobart and William Smith Colleges); Ngoc Q. Pham (FPT School of Business & Technology, FPT University) |
| Abstract: | Many concerns surround the continuing globalization of commerce and employment, including the concern that these processes have led to unstable working conditions, including more use of temporary workers. Despite these public fears, the trade literature to date has found little evidence that either exporting or importing leads to hiring a higher share of temporary workers. We analyze whether increased engagement in international trade has led to changes in the use of temporary workers in Vietnam, a country that has recently rapidly integrated into the world economy. Using data from two six-year balanced panels of the Vietnamese Enterprise Survey, covering 2010-2015 and 2017-2022, we utilize propensity score matching techniques to look for the effect of engaging in international trade on labor force composition in the manufacturing, wholesale and retail trade, and services sectors. We find during both time spans that firms newly engaging in international trade make lower use of temporary workers, both relative to non-traders, and overall, even as they maintain their overall employment and raise their wages. |
| Keywords: | Vietnam, trade, temporary workers |
| JEL: | D22 F16 J23 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wes:weswpa:2026-004 |
| By: | Djanibekov, Nodir; Kurbanov, Zafar; Tadjiev, Abdusame; Dhehibi, Boubaker; Akramkhanov, Akmal |
| Abstract: | Agricultural sector in Uzbekistan is undergoing rapid modernization driven by institutional reforms and mounting pressure to ensure sustainable land and water resource use. This study investigates the adoption and impacts of four sustainable agricultural practices (SAPs) promoted for sustainable intensification: crop rotation, manure application, drip irrigation, and laser levelling. Using nationally representative survey data from 1, 225 farms across four major regions (Andijan, Kashkadarya, Khorezm, and Samarkand) collected in 2024, we employ a multivariate probit model to analyze complex, inter-dependent adoption decisions and their determinants. Subsequently, we apply treatment-effects models to assess the impact of individual practices and selected bundles on three critical outcomes: farm revenue, an agronomic sustainability index, and the gender wage gap among seasonal workers. Our analysis reveals that SAP adoption patterns are highly practice-specific. Crucially, perceived profitability, benefits and challenges are strong predictors of uptake, while standard structural variables (education, farm size, and extension contact) are inconsistent determinants across practices. Modern technologies are more strongly linked to institutional arrangements, farm structure, and training than are traditional practices. Results on impact are nuanced: no single technology improves all three outcomes simultaneously. Drip irrigation emerges as the most promising individual practice, significantly raising both revenue and sustainability. In contrast, laser levelling shows no clear average economic gains. Importantly, SAP bundles consistently outperform single practices on sustainability and sometimes on revenue. Social impacts are mixed: crop rotation tends to widen, while the joint adoption of laser levelling and drip irrigation narrows, the gender wage gap. Overall, the findings underscore the necessity of practice-specific and portfolio-based policy support for sustainable agriculture in reforming transition economies. |
| Keywords: | Technology adoption, Irrigated farming systems, Multivariate probit, Treatment effects analysis |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iamodp:337498 |
| By: | Tibor Szendrei; Nikolett V\'ag\'o; Katalin Varga |
| Abstract: | This paper develops a House Price-at-Risk framework to examine how housing subsidies, credit conditions, and supply factors influence the distribution of house price growth in Hungary. Using quantile regression with adaptive LASSO variable selection, we identify variables driving downside versus upside risks across multiple horizons. Financial stress dominates the lower tail at short horizons, while unemployment and affordability constraints become the primary drivers of downside risk at longer horizons. Housing subsidies exhibit pro-cyclical characteristics, concentrating significant positive effects on the upper quantiles while leaving the lower tail largely unaffected. Supply-side variables display horizon-dependent sign reversals, with construction permits exerting upward pressure on prices in the short run but moderating them as supply materialises. Uncertainty decomposition reveals persistent left-tail dominance across all horizons. These findings suggest that macroprudential frameworks should account for the distributional effects of housing subsidies, particularly their pro-cyclical influence on house price growth. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.18592 |