Transition Economics http://lists.repec.org/mailman/listinfo/nep-tra Transition Economics 2026-05-04 A Wartime Labor Market https://d.repec.org/n?u=RePEc:crm:wpaper:26010&r=&r=tra 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. Tito Boeri Giacomo Anastasia Oleksandr Zholud labor supply shock, reallocation, vacancy filling rate, wartime economy 2026-01 What Drives Refugees’ Return After Conflict? https://d.repec.org/n?u=RePEc:crm:wpaper:2565&r=&r=tra Refugees' decisions to return after conflict carry significant political and economic implications for the origin and host countries. We examine how conflict resolution, security, economic conditions, and corruption influence return decisions. To estimate the causal effect of post-war conditions, we conducted a single-profile conjoint experiment among 2543 Ukrainian refugees across 30 European countries. Respondents were asked how likely they would be to return to Ukraine under different hypothetical scenarios. Results show that territorial integrity and security guarantees are critical, while economic prospects and combating corruption also play an important role. Refugees planning to return are more responsive to different post-war scenarios, and younger respondents are particularly influenced by income opportunities, job prospects, and potential EU accession. Our findings suggest that targeted political and economic reconstruction policies can substantially influence post-conflict return. In the most optimistic scenario, the expected return rate is 47%; in the most pessimistic scenario, only 3%. Joop Adema Lasha Chargaziia Yvonne Giesing Sarah Necker Panu Poutvaara Refugees; Return migration; Conflict; Integration; Ukraine; Conjoint experiment 2025-09 Migratory Responses to Air Pollution Reduction: Evidence from Large-scale Desulfurization Programme https://d.repec.org/n?u=RePEc:crm:wpaper:2581&r=&r=tra This paper examines how improvements in air quality affect migration behavior. We exploit a natural experiment in the Czech Republic, where rapid desulfurization of coal-fired power plants in the 1990s led to a sharp reduction in SO2 pollution - from extremely high levels to below EU/WHO limits - without directly impacting economic activity. Using a difference-in-differences approach, we find that cleaner air reduced emigration from previously heavily polluted municipalities by 24% and increased net migration by 78%, with effects strongest in the most polluted areas. The impact was particularly pronounced among highly educated individuals. Migration responses were strongest in municipalities with weaker social capital and fewer public amenities, suggesting that environmental improvements matter most where other local advantages are limited. In contrast, anti-emigration monetary subsidies-such as those offered during the socialist period in polluted areas-had no effect. Overall, our findings highlight the potential of environmental policies to support re-population and regional revitalization-especially when combined with investments in infrastructure and public services. Å tÄ›pán Mikula Mariola Pytliková Air quality; Migration; Natural experiment 2025-10 Heterogeneous Impacts of Macroprudential Policies: Financial Advisors, Regulatory Caps, and Mortgage Risk (Martin Cesnak, Andrej Cupak, Pirmin Fessler, Ján Klacso) https://d.repec.org/n?u=RePEc:onb:oenbwp:263&r=&r=tra This paper examines the impact of borrower-based macroprudential policy tightening on mortgage lending in Slovakia, focusing in particular on the role of financial advisors in shaping loan characteristics. Using a comprehensive loan-level dataset from Slovak banks, we analyze the effects of key regulatory tools — Loan-to-Value (LTV), Debt-to-Income (DTI), and Debt Serviceto- Income (DSTI) limits — on mortgage risk profiles. Our contributions include: (1) showing that restrictive borrower-based measures (BBMs) reduce the riskiest loans but push lower-risk segments toward regulatory thresholds, thus increasing portfolio risk; (2) demonstrating that advisor-mediated loans tend to have higher amounts, LTVs, DTIs, and longer maturities, raising their riskiness; and (3) finding that strict enough DSTI limits not only reduce DSTI but may also indirectly effect other loan characteristics, such as DTI, LTV ratios, and loan volumes, suggesting broader policy impacts. Additionally, we identify significant front-loading behavior following policy tightening announcements, particularly for advisor-mediated loans. These findings highlight the importance of detailed micro-level data in capturing policy effects and informing more effective macroprudential regulation. Martin Cesnak Andrej Cupak Pirmin Fessler Ján Klacso debt behavior, financial advice, macroprudential policy, policy evaluation, heterogeneous effects, register microdata. 2025-01-16 Collective Memory and National Identity Formation: The Role of Family and the State https://d.repec.org/n?u=RePEc:crm:wpaper:25112&r=&r=tra State-led repression of minority identities is a well-documented phenomenon, yet its implications for national identity remain understudied. We examine how the Soviet state-induced famine (1932-33) shapes contemporary Ukrainian national identity through vertical (familial) and horizontal (community/state) transmission. Using newly geocoded individual-level data, we find that individuals from high-famine-exposure areas are more likely to identify as Ukrainian. We document that under Soviet rule, family networks preserved identity, while church closures weakened community transmission. After independence, state-led remembrance efforts, revitalized horizontal transmission. Our findings show how repression and remembrance shape identity persistence and reflect the famine's lasting influence on Ukrainian-Russian relations. Björn Brey Joanne Haddad Lamis Kattan Political Repression, National Identity, Intergenerational Transmission, Historical Memory, Trade, Conflict. 2025-11 Risk Preferences and the Willingness to Relocate to Danger: Evidence from Wartime Ukraine https://d.repec.org/n?u=RePEc:iza:izadps:dp18557&r=&r=tra We elicit reservation wage premia for relocating to two Ukrainian cities, using a household survey conducted in mid-April to mid-July 2024 during the Russian invasion of Ukraine: high-risk Kharkiv (near the frontline) and moderate-risk Kyiv. Risk tolerance is a strong predictor of willingness to move to Kharkiv - the most risk-averse have roughly half the odds of the most risk-tolerant - but matters much less for Kyiv. This asymmetry is difficult to reconcile with the hypothesis that risk tolerance merely proxies for general mobility preferences. Separately estimating the elasticity of intertemporal substitution (EIS~0.04), we find that including it renders risk tolerance insignificant for Kyiv but not for Kharkiv - a pattern illuminated by the Epstein-Zin separation of risk aversion and the EIS: risk aversion adds predictive power only when danger is high, while the EIS operates equally for both cities as a common relocation-cost channel. The very low EIS implies that relocation incentives structured as future benefits may be ineffective; frontloaded subsidies are more likely to influence behavior. Gorodnichenko, Yuriy Kudlyak, Marianna Lobozynska, Sophia Skomorovych, Iryna Vladychyn, Ulyana Kovalyuk, Andriy Snovydovych, Iryna risk preferences, elasticity of intertemporal substitution, migration, compensating differentials, Ukraine, war 2026-04 Integrating Ukraine into the EU single food market: navigating the common market organization framework https://d.repec.org/n?u=RePEc:pra:mprapa:128748&r=&r=tra Despite Russia’s ongoing military aggression, Ukraine has made substantial progress toward EU accession, formally launching negotiations in 2024 after obtaining candidate status in 2022 and completing the legislative screening process in 2025. Alignment with the EU acquis will require far-reaching economic and institutional transformation, particularly in agriculture, one of Ukraine’s most important and politically sensitive sectors. This paper focuses on the Common Organisation of Agricultural Markets (CMO), a central but often overlooked pillar of the EU’s Common Agricultural Policy. While public debates have largely emphasized direct payments and fiscal costs of accession, the CMO plays a crucial role in shaping market regulation, competition, and trade within the EU Single Agri-Food Market. The paper analyzes the main features of the CMO, assesses implications for Ukraine’s accession process, and discusses policy options to manage adjustment pressures for both Ukraine and the EU. Nivievskyi, Oleh Ukraine, Trade, agriculture, competitiveness, EU integration 2025-11 How Phillips Curve Dynamics Enhance Business Cycle Synchronization Analysis in Central and Eastern Europe (Nico Petz, Thomas Zörner) https://d.repec.org/n?u=RePEc:onb:oenbwp:267&r=&r=tra This paper analyzes business cycle synchronization and the Phillips curve (PC) relationship in Central, Eastern, and Southeastern European (CESEE) economies relative to the euro area. We find an overall increase in business cycle synchronicity, particularly among Euro adoption candidates, with notable heterogeneities during the early 2000s, the global financial crisis, and the euro crisis. Using a Kalman filter to extract business cycles and various measures of synchronicity, we show that CESEE EU countries align more closely with the euro area than non-EU countries. The unemployment-inflation relationship, analyzed with time-varying parameter (TVP) models, reveals a steepening of the Phillips curve post-COVID-19, with negative slope coefficients across all countries. We observe a growing convergence of the PC slope toward the euro area, especially in candidate countries. These results highlight the role of EU membership in fostering economic synchronization and emphasize the importance of considering time-varying dynamics in assessing economic convergence amid major shocks. Nico Petz Thomas Zörner Business cycle alignment, synchronization, EMU, euro area, CESEE, time-varying parameter model 2025-05-15 The Long-Term Effects of Air Pollution on Health and Labor Market Outcomes: Evidence from Socialist East Germany https://d.repec.org/n?u=RePEc:crm:wpaper:2585&r=&r=tra What are the long-run effects of sustained exposure to air pollution? A unique natural experiment allows us to examine this question. In 1982, a sudden cut in Soviet oil forced Socialist East Germany to switch to highly polluting lignite coal. While the shock sharply increased air pollution near mining regions, authoritarian restrictions on mobility, housing, and jobs prevented sorting responses. We document persistent labor market impacts over three decades. Exposed individuals work less, earn lower wages, and retire earlier. Health is a key mechanism: infant mortality rises by 9% and the long-run incidence of asthma and cardiopathy increases significantly. Moritz Lubczyk Maria Waldinger Air pollution, labor supply, migration, place effects 2025-10 The Rise of Viet Nam's Solar Panel Industry: Inputs, FDI, and Spillovers https://d.repec.org/n?u=RePEc:crm:wpaper:25138&r=&r=tra We document how foreign firms, inputs, and subsidies have shaped the development of Viet Nam's solar panel industry. We use firm-to-firm transaction data from Panjiva as well as firm-level data from the Vietnamese Enterprise Survey to trace solar panel value chains. We uncover three key findings: First, parts and components from subsidizing countries are 30% cheaper than alternatives. Those from China, which provides the majority of solar inputs to Vietnamese producers, are cheapest. Foreign subsidies may thus spill over across countries via value chains. Second, Chinese FDI firms dominate Viet Nam's solar industry, accounting for 75% of exports and 50% of jobs, while exporting solar panels that are 38% cheaper than those of other producers in Viet Nam. Third, local firms supplying parts and components to these Chinese FDI firms experience positive productivity gains. Our findings show how Viet Nam's solar boom emerged through deep integration into China's subsidized supply chains. Meng Yu Ngov Pierre-Louis Vézina Trang Thu Tran Gaurav Nayyar global value chains, green subsidies, FDI 2025-12 Developing a risk-based stress testing framework for microfinance banks in Uzbekistan: A SVAR approach https://d.repec.org/n?u=RePEc:gii:giihei:heidwp12-2026&r=&r=tra This paper develops a risk-based stress-testing framework for emerging microfinance banks using a structural vector autoregressive (SVAR) approach. The model captures the dynamic transmission of key macroeconomic shocks, including economic activity, monetary policy, and exchange-rate movements, to supervisory-relevant banking indicators, including nonperforming loans, capital adequacy, and lending behaviour. The empirical analysis focuses on identifying macro-financial transmission channels that are particularly relevant for supervisory stress testing in newly established banking segments. Impulse response functions are used to derive baseline and adverse macroeconomic scenarios and to evaluate how shocks propagate to banking-sector risk indicators over time. The results highlight the important role of external and monetary shocks in shaping asset quality and capital resilience, underscoring the relevance of macro-financial linkages for the supervision of microfinance banks. The framework proposed in this study provides a transparent and operational tool for translating macroeconomic disturbances into supervisory risk indicators and supports the implementation of risk-based supervision as the microfinance banking sector develops in Uzbekistan. Farrukh Nematov stress testing; SVAR; macro-financial linkages; microfinance banks; exchange rate shocks; capital adequacy; non-performing loans 2026-04-21 The subjective well-being consequences of short-term forced displacement https://d.repec.org/n?u=RePEc:cer:papers:wp819&r=&r=tra How does an episode of forced displacement affect the subjective well-being of victims upon their return? To answer this question, we study the weeklong inter-ethnic conflict that occurred in southern Kyrgyzstan in June 2010, using individual survey data for 2006–2019. Our baseline analysis compares conflict-affected displaced individuals with unaffected individuals while controlling for observable characteristics. To address the potential endogeneity of displacement, we complement these estimates with an instrumental-variables strategy based on household-level geographic features, including proximity to conflict-related destruction and the availability of nearby locations suitable for temporary hiding. We also use a difference-in-differences design to trace changes in local subjective well-being over time. Our results show that even short-term displacement is associated with a substantial decline in postconflict subjective well-being. This negative effect is attenuated among individuals who received support from family and friends during displacement. The effects also vary markedly across dimensions of subjective well-being, with the strongest negative impacts observed for satisfaction with dwelling, health, security, and future prospects. Although the subjective well-being of displaced individuals gradually converges toward that of non-displaced individuals, recovery is slow and takes several years. Azizbek Tokhirov Riga Qi Trang Thanh Tran forced displacement, subjective well-being, inter-ethnic conflict 2026-04 Legal Challenges and Approaches to Taxation of Digital Asset Transactions https://d.repec.org/n?u=RePEc:osf:lawarc:uy3rq_v1&r=&r=tra Introduction. In the modern digital economy, transactions involving digital assets represent one of the most complex challenges in the field of financial law and tax administration. The absence of a unified legal definition of digital assets across different jurisdictions leads to conflicts in their classification as property, goods, currency, or financial instruments. Such discrepancies create conditions for “regulatory arbitrage” and increase the risks of tax evasion in the cross-border space. The rapid development of the cryptocurrency market and the implementation of blockchain technologies generate new challenges for national tax systems and necessitate the harmonization of legal approaches at the global level. Purpose. The purpose of the study is to conduct a comprehensive analysis of the legal challenges and approaches to the taxation of digital asset transactions, to identify the advantages and limitations of existing models in the European Union, the United States, and Asia, and to determine the directions of international harmonization in the context of financial digitalization. Materials and Methods. The materials of the study include scientific publications and regulatory legal acts concerning the legal status of digital assets and the practice of their taxation. The methodological framework is based on comparative legal analysis, logical generalization, systematization, and bibliometric review of modern research. An analytical approach without empirical data was applied to assess the impact of technological innovations. Results. The article systematizes approaches to the definition of digital assets in major jurisdictions and analyzes their tax regimes. It is established that the absence of a unified legal approach hinders the development of a stable international taxation system. The paper reveals the application of the MiCA Regulation in the EU, the fragmented U.S. model, and the polar scenarios of Asian countries. The results of pilot projects in the United Kingdom and Estonia on the use of blockchain technologies in tax administration are presented. It is proven that the effectiveness of digital solutions depends on the institutional capacity of the state and the level of international coordination. Prospects. Further research should focus on developing a model for a harmonized legal definition of digital assets, unifying approaches to their taxation, and creating unified standards for the use of blockchain technologies in tax administration systems. This will help reduce regulatory fragmentation and enhance the transparency of the global financial market. Strutovska, Nataliia 2025-09-30 Identification and Estimation of Continuous-Time Job Search Models with Preference Shocks https://d.repec.org/n?u=RePEc:crm:wpaper:25153&r=&r=tra This paper applies some of the key insights of dynamic discrete choice models to continuous-time job search models. Our framework incorporates preference shocks into search models, resulting in a tight connection between value functions and conditional choice probabilities. In this environment, we establish constructive identification of the model parameters, including the wage offer distributions off- and on-the-job. Our framework makes it possible to estimate nonstationary search models in a simple and tractable way, without having to solve any differential equations. We apply our method using Hungarian administrative data. Longer unemployment durations are associated with lower offer arrival rates, resulting in accepted wages falling over time. Counterfactual simulations indicate that increasing unemployment benefits by 90 days results in a 14-day increase in expected unemployment duration. Peter Arcidiacono Attila Gyetvai Arnaud Maurel Ekaterina Jardim Job search, Identification, dynamic discrete choice 2025-12