This conference will bring together researchers interested in population well-being in the region and provide an opportunity for extended dialogue among academic and policy researchers, government officials and policymakers to promote use evidence-based decision making at all levels.
The summary of few researches which will be presented at Conference is below:
1. The Happiness Transition
Sergei Guriev, EBRD, Sciences Po, and CEPR
Until recently, scholars of life satisfaction surveys have documented the presence of a so-called “transition happiness gap”: the fact that residents of post-communist countries report lower life satisfaction than their peers in countries with similar levels of income who did not experience transition. The literature has explained this finding as being due to the great macroeconomic instability of the 1990s; a substantial decrease in the quality and accessibility of public goods; the major increase in inequality; and the difficulties of adapting one's knowledge and skills to the needs of the market economy. All these factors were expected to subside over time — at least after the recovery from the global financial crisis of 2008-09. In our paper we use the newly available data (the 2015-16 wave of the Life in Transition Survey and the 2010-16 waves of the Gallup World Poll) and find that the transition happiness gap had finally closed by 2016. Controlling for various socioeconomic characteristics, the residents of post-communist countries are no longer less satisfied with life than their peers in comparable countries. In this sense, the “happiness transition” has finally been completed. We find that this convergence was primarily driven by the younger and middle-aged individuals, while the older generations still report significantly lower levels of happiness in post-communist countries. If in 2010 the transition happiness gap did not exist for individuals aged 24 and younger, by 2016 the gap had closed for all the cohorts that were younger than 45. The older generations residing in post-communist countries are still significantly less satisfied with life than their peers in comparator countries, although the difference has become substantially smaller as well. We find that the happiness gap closed for individuals both with and without higher education. Among the educated, the happiness convergence was particularly strong for younger individuals who received their education after the transition to market. This result is consistent with a “human capital depreciation” argument positing that recent graduates have acquired skills that were more suitable for the needs of the market economy.
2. Non-standard employment as the future of work: consequences for workers in post-transition economies
Mariya Aleksynska, ILO
The paper looks at what determines individual's satisfaction with a job. To do so, it analyzes individual-level data collected in 35 European countries. The paper shows that workers with a temporary formal contract or no employment contract have a lower job-satisfaction as compared to workers with stable formal contracts. The negative effect of having no contract is twice as high as having a temporary contract. However, this effect is not uniform across countries. In countries with a high incidence of temporary employment, workers with remporary contracts are all the more unsatisfied with their jobs, a finding that reflects lower transition rates to stable employment. In contrast, the higher spread of informal working arrangements in a given country boosts the job satisfaction of workers without contracts (which, however, still remains lower as compared to other workers), suggesting that in such settings, arrangements without contracts may be long-term and relatively similar to formal open-ended contracts. The effect of contractual arrangements on job satisfaction propagates mainly through working conditions and work quality. It is this worse work quality - especially as concerns prospects, physical security at the workplace, skills and discretion, and working time quality - that is associated with formal temporary and with informal contracts and that in its turn renders job satisfaction lower than for regular workers. Once again, the quality of work for individals in different contractual arrangements differs depending on the general prevalence of such arrangements in a given country, pointing to different employers’ strategies with respect to using temporary and no-contract arrangements.
3. How Unemployment affects Subjective Wellbeing in Ukraine
Edward Norton, University of Michigan and NBER
There is a long debate in economics about how much unemployment affects happiness. Although people are generally happier when employed than unemployed, it is not clear how long the effect lasts, or if unhappy people are less employable. We measure the effect of unemployment on happiness in Ukraine over a recent 12-year period. We find that being unemployed lowers happiness by roughly the equivalent of increasing age to 60 years old. Overall, in Ukraine the strongest effect of unemployment on happiness is current unemployment, not past unemployment.
4. Self-employment and wellbeing: a comparative study
Oleksandr Talavera, Swansea University
Rewarded as innovators but also stressful roles, entrepreneurs are often under a great pressure to sustain and grow the business. They are in charge of getting extra finance, being more creative or leading people. These demands, in turn, directly affect entrepreneurs’ well-being. For example, it has been revealed that 72% of entrepreneurs have mental health concerns. As well-being is closely related to work performance and business outcomes, it is important to understand the factors that can improve entrepreneurial satisfaction. This concern is even more important in emerging economies that experience the fast transformations in institutional setup and business environment. In an attempt to address the above concern, we examine the level of entrepreneurs’ job satisfaction and life satisfaction in three emerging markets, namely China, Russia and Ukraine. As external financing is one of the key constraints faced by the self-employed, we investigate whether the financial development could improve entrepreneurial utility in these countries. We collect data from three sources including the 2013 China Household Income Project, the 2007 and 2012 waves of Ukrainian Longitudinal Household Survey and the 2007-2013 waves of Russian Longitudinal Household Survey. Our estimation sample consists of 3,399 individuals in Ukraine, 9,722 individuals in China and 9,437 individuals in Russia. We find differences in entrepreneurial satisfaction among these countries. More specifically, the self-employed in China and Russia are happier compared to the paid employees while the opposite is observed in Ukraine. We also observe that financial development does not affect Chinese entrepreneurs’ satisfaction. However, greater financial development can improve life satisfaction of Ukrainian self-employed but reduce job satisfaction among Russian entrepreneurs. The insignificant effect of financial development on Chinese entrepreneurs’ well-being could be caused by the reliance on external finance from the informal sector. Thus, the development of the formal financial sector is not associated with entrepreneurial well-being. However, in Russia and Ukraine, financial development could affect entrepreneurial well-being through both monetary and nonmonetary factors, resulting in different effects on life and job satisfaction. On the one hand, the higher level of financial development could boost economic growth, making all individuals including the self-employed happier. On the other hand, greater financial development could result in more credit availability and better credit allocation that might relax the financial constraints and encourage individuals to enter self-employment. Hence, the level of competition in the market increases, making existing entrepreneurs less satisfied at work.
5. The well-being of migrants during the global financial crisis: Evidence on illegal employment, ethnic discrimination and deportation
Alexander Danzer, KU Eichstätt-Ingolstad
This research explores the economic and social well-being of Tajik labor migrants in Russia during the global financial crisis in 2008/2009. The migration corridor between Tajikistan and Russia is one of the busiest in the world, with Tajikistan being highly dependent on migration and remittances. The majority of Tajik migrants in Russia work in the construction and service sectors that were badly hit by the global financial crisis. Although many Tajik migrant workers prolonged their stay in Russia during the time of crisis, their wages declined, resulting in an overall lower economic gain from migration. At the same time, illegal employment, harassment and deportations became more widespread. These changes not only inhibited Tajik migrants‘ self-determination and safety, but also implied monetary costs. Migrants concerned had to return home prematurely and earned lower wages on unregistered jobs. The calculated income loss accrued to more than ten percent of annual earnings per migrant. Whether tightening immigration during an economic downturn is politically wise is yet unclear. While deportations of immigrants are symbolically strong and may suit governments well when nationalism and xenophobia are on the rise, the cost implications for firms that rely on cheap (and often unregistered) immigrant workers suggest a decline in overall employment. Illegality can be a strategy for firms to survive an economic crisis; however, as is shown for Tajik migrant workers in Russia, illegality and harassment put stress on immigrants and hurt them economically. In a sense, vulnerable migrants are those who have to bear the effects of the economic crisis felt by firms and the resulting political pressure exerted by the government.
6. War and Well-Being in Transition
Gunes Gokmen, New Economic School
2008 was a good year for the well-being of ordinary people in Russia. In 2008, Russia has reached the peak of a 10-year economic growth boom, and the consequences of the world financial crisis have not yet realized. However, despite the dynamism of the economy, some residents of Russia were impacted by other sources of distress. A conflict between Russia and Georgia broke out in August 2008, followed by a period of worsening relations between the two countries. In this study, we focus on how the Russo-Georgian conflict of 2008 affected the subjective well-being and happiness of minorities in Russia. First, our findings suggest that the subjective well-being of Georgian residents in Russia drastically suffered from the conflict, both in comparison to their own subjective well-being across time and to the well-being of the Russian majority. Georgian nationals became significantly less satisfied with life, with their job situation, and with their own health. Yet, this negative effect of conflict was short-lived, and it disappeared shortly after 2008. Additionally, we demonstrate that the conflict has no direct effect on the livelihoods or the labor market outcomes, such as wage and employment, of Georgian nationals. Therefore, we attribute our main findings not to labor market discrimination but rather to more indirect channels such as fear, altruism, or sympathy. We also analyze the spillover effects of the Russo-Georgian conflict on other minorities that live in Russia. We find that while the subjective well-being of migrant minorities who have recently moved to Russia is negatively affected, there is no effect on local minorities who have been living in Russia for at least ten years.
7. The Impact of Transition on Height and Subjective Well-Being
Francesca Dalla Pozza, European Bank for Reconstruction and Development
The transition of post-communist countries from planned to market economies has been a unique political, social and economic transformation that changed the life of many people in a relatively short period of time. The early years of such process were accompanied by an economic recession, which was short-lived in some countries, but deep and long-lasting in others. Our paper uses newly available data from the 2016 round of the Life in Transition Survey – implemented by the European Bank for Reconstruction and Development (EBRD) and the World Bank - to analyse the impact of the early transition years on the objective and subjective well-being of the residents of these countries. Our data cover over 51,000 households in 29 post-communist countries and 5 comparator countries and include information on an important health measure - height -, as well as life satisfaction, beliefs and attitudes of the people in the region. A large body of literature has shown how socio-economic deprivation in the first years of a person's life is linked to lower adult height, but also lower educational attainment, IQ and earnings later in life. Numerous studies have thus used height as an objective indicator for quality of life and well-being. In our research, we examine the adult height of individuals who were in their childhood in the early years of the transition process, and compare it to the adult height of their older and younger peers. We also analyse whether people who were in their “formative years” - the period comprised between ages 18 and 25, when people's personality is shaped - during those years have different attitudes towards democracy and the market economy or a different level of happiness with respect to the rest of the population. Our results are striking. We find that children born around the onset of transition are one centimetre shorter today than their older and younger peers. This finding points to the substantial hardship their families experienced in the early years of transition reforms. However, transition did not have any negative long-term implications on the happiness levels of the cohorts born at that time. If anything, people born at the start of transition are happier than their peers. Although this optimistic message is true for most cases, we also show that individuals born to disadvantaged families do report lower levels of happiness than their peers of the same age who were born to non-underprivileged backgrounds. Finally, our results show that individuals who faced transition in their formative years are more supportive of democracy and of the market economy. This finding is remarkable, as it indicates that the positive sentiment towards the early transition reforms has been permanently impressed on the beliefs of these cohorts.
8. Alcohol consumption habits in Eastern and Western Europe
Gintare Malisauskaite, University of Kent
Drinking behaviour in the former USSR has been subject to myriad of stories, myths, as well as serious research. Given the nature of the extent and influence of the soviet communist regime on its satellite Eastern European countries, the connection between alcohol drinking habits and pre-1989 communist regimes seems plausible. The co-authored paper “Drinking under Communism: how Alcohol Consumption Habits in Eastern Europe Compare to the West?” addresses this question and treats found differences as an expression of cultural habits and norms. Findings suggest that the prevailing communist regimes in previous Eastern Bloc countries influenced drinking behaviour of individuals exposed to the system during impressionable years (between the ages of 18-25 or longer). This manifested as a tendency to consume alcohol more frequency and to binge drink more (to have 6 or more drinks on one occasion). The results hold after controlling for personal characteristics, socio-economic circumstances, social relations, geographic indicators, personal habits, environment and country indicators. The effect associated with communist regime is comparable in size to the influence of separate socio-economic characteristics for alcohol consumption frequency, and is one of the main influences for binge drinking. During the period of ‘post-communism’, on the other hand, the frequency of alcohol consumption increased even further, but the effect on heavy drinking is less determined. These findings suggest that cultural environment is potentially very important for human behaviour formation, in this case – alcohol consumption norms; it also hints at possibility that there was a change in alcohol consumption habits after the collapse of Soviet Union, and people of this generation could be moving towards more globalised attitudes. And since alcohol consumption is directly related to consumer’s health, we can conclude that over 40 years of exposure to communist regime would have a detrimental effect on the health and wellbeing of the people there. The study uses European Health Interview Survey micro-data. This paper contributes to the studies examining the impact of communist regimes on various aspects of socio-economic life, and also to research in health economics, by investigating the effect of political and social circumstances on the alcohol consumption habits and well-being of individuals.
9. Going Beyond the First Child Analysis of Russian Mothers’ Desired and Actual Fertility Patterns
Elena Besedina, USAID, Kyiv Economics Institute
Low fertility rate remains one of the main demographic problems in the Eastern Europe. Unlike some Western European countries (e.g., Italy), where an increase in childlessness was a factor in fertility declines, low overall fertility in Eastern European countries can be explained predominantly by a high prevalence of one-child families. However, for the majority of families, the desired family still includes two children. This implies considerable space for policy to play an important role in enabling families to fulfill their fertility aspirations. A deeper understanding of the factors that affect fertility aspirations and realizations could enable policy makers to help families attain their desired number of children. For our analysis, we used data from the demographic survey of the Russian population over the period 2004-2012. This study’s main focus and contribution to the literature is on whether the motherhood-career trade-off is a potential obstacle to higher fertility in Russia. Overall, the results of our study suggest once mother’s demographics, partner’s characteristics, household welfare, and childcare arrangement are controlled for, stable employment seems to be important factor affecting second-order births. These results support the initial hypotheses of the importance of work and family balance on the decision to have a second child. In this paper, we contrast our findings to a recent stream of studies concentrated on the changes in subjective well-being and decision to have another child. The effect of the stable employment is preserved when we include measures of the subjective wellbeing suggested in the recent literature. Given the two-child ideal family size, these results suggest that providing an enabling environment for second-order births can raise overall fertility. Besides supporting families with financial transfers, fertility can be stimulated by measures promoting greater gender equity within families and in workplaces, aiming to improve women’s balance between work and motherhood.
10. Youth on the move: the returns to geographic and job mobility of young people in post-Soviet countries
Olga Kupets, Kyiv School of Economics/ IZA
Several decades ago employment stability was the norm, particularly in centrally planned economies. Today, we observe monumental shifts in the world of work: lifelong employment by one firm becomes rarer; workers, especially the youngest ones, are increasingly opting for moving between jobs, sectors and areas regularly over having a job and career for life. What do we know about job mobility of youth in the first years after exit from education in the countries which previously belonged to the Soviet Union or to the Socialist Federal Republic of Yugoslavia and inherited common institutional restrictions on hiring and firing of workers? What are the consequences of early labor market experiences on current labor marker status and well-being at work? Do young people who were forced to leave previous job(s) because of dismissal, layoff or the end of a temporary contract have different outcomes compared to their peers who voluntarily quit their previous job(s)? Our study provides answers to these questions using the ILO School-to-Work Transition surveys of youth in five post-Soviet (Armenia, Kyrgyz Republic, Moldova, Russia, and Ukraine) and three post-Yugoslavian (Macedonia, Montenegro and Serbia) countries conducted in 2013-2015. First, we construct 60-month calendars for 6,151 young individuals who have completed their formal education at least 5 years prior to the survey to examine the patterns of job mobility in the first years after exit from education and to compare them to the patterns observed in developed countries. Then we test the effects of several variables which measure early labor market experience on the probability of joblessness and precarious employment vs. standard employment, on subjective job satisfaction and on wages of employees reported at the time of survey. Several findings emerge from the study. Post-Yugoslavian countries differ from post-Soviet countries in terms of the share of youth in unemployment and generally low job mobility over the five-year post-schooling period. Moldova stands out as the country in which the share of inactive youth stays above 40 percent till the end of the five-year post-schooling period, mainly due to common periods of inactivity after the first and second jobs. Ukraine has the highest level of youth job mobility among studied transition economies, but it lags behind all European countries including France which is characterized by overregulated and inflexible labor market. Preliminary empirical results provide support to our hypothesis that higher job mobility of youth after graduation is associated with positive returns reflected by lower probability of precarious employment or joblessness and higher job satisfaction, especially when job changes are initiated by young people. Meanwhile, involuntary multiple job separations bring the negative outcomes.
11. Children’s (Un)happiness in Transition
Maksym Obrizan, Kyiv School of Economics (Ukraine)
There are several studies that compare the life satisfaction of grown-ups in transition countries (that is, countries from the former Communist bloc) to the life satisfaction of grown-ups in non-transition countries. They typically document a ‘happiness gap’. That is, if you take two adults, one living in a transition country, the other living in a non-transition country who, for the rest, have the same characteristics (they have the same age, gender and socio-economic status, live in countries with similar characteristics), then the adult living in a transition country is substantially less likely to say (s)he is satisfied with life. In our paper, rather than looking at adults, we focus on children, aged 11 to 15, and how satisfied they are with their life over the period 1989-2015. We investigate the determinants of their life satisfaction and whether they too are ‘abnormally’ unhappy. Our analysis suggest that on average, children are more happy than adults. Countries with, on average, happy adults are unlikely to have, on average, unhappy children but there are countries where children are, on average, fairly happy while adults there are relatively unhappy. As a consequence, there is much less life satisfaction inequality among children than among adults. Our results further indicate that life satisfaction of children tends to decrease with age, tends to be lower for girls, and that health problems and relative poverty (in terms of absence of certain goods) go together with lower life satisfaction. As far as the happiness gap is concerned, we find similar results as have been reported adults. In the early 2000s 11- to 15-year-old children in transition countries reported on average 0.2 to 0.4 life satisfaction points less than their peers in non-transition countries. Although on 0 to 10 scale this might look small the negative ""transition country effect"" is comparable in magnitude to reporting health problems or absence of a car. Similarly to studies for adults the gap in life satisfaction reduces over time and, for children, becomes insignificant by 2010. This suggests that at least in terms of average life satisfaction, the ‘transition period’ is over. That being said, for some subgroups some gap remains: we observe no transition effect for 15 year olds starting from 2002 but the effect for 11 year olds remains negative and significant even in 2010. Finally, we do not find a negative transition country effect in happiness with school indicating that pupils’ evaluation of the school environment is unlikely to ‘explain’ the happiness gap.
12. Math, Girls and Socialism
Quentinn Lippman, Universit´e Paris-Sorbonne and Paris School of Economics
We focus on one of the most resilient and pervasive gender gaps in modern societies: mathematics. We provide the first piece of causal evidence that girl’s under-performance in math is largely due to stereotypes and institutions. We use the German experience of division and reunification. The socialist episode in East Germany has constituted a radical experiment in gender equality in the labor market and other instances; it has left persistent tracks on gender norms. We show that the gender gap in math is still much smaller in East German regions than in Western regions, due to the legacy of the socialist episode. We show that this East-West difference is due to girls’ attitudes, confidence and competitiveness in math, and not to other confounding factors, such as the difference in economic conditions or teaching styles across the former political border. We also provide illustrative evidence that the gender gap in math is smaller in European countries that used to be part of the Soviet bloc, as opposed to the rest of Europe. The lesson is twofold: (1) a large part of the pervasive gender gap in math is due to social stereotypes; (2) institutions can durably modify these stereotypes.