rafmacalaba/datause-encoder-data huggingface dataset:
Immigration to Switzerland - the
            case of the Former Republic of Yugoslavia
From less than 5 percent in 1980, the
            share of residents from the former Republic of Yugoslavia in
            the total foreign population in Switzerland rose to almost
            25 in 2000, to become one of the largest foreign
            communities. The largest increase occurs mostly between 1985
            and 1998 and represents a unique development in the
            composition of immigration to Switzerland, as it coincides
            with a new policy, which from 1995 gives priority to workers
            from the European Union for new permits and severely
            restricts work permits for migrants from the rest of the
            world. The empirical analysis shows that when there is no
            discriminatory treatment by immigration policy, immigrant
            workers from the former Yugoslavia respond to financial and
            cultural incentives in the same way as their unskilled
            counterparts from Southern European countries. The
            restriction on permit availability in the mid-1990s appears
            to have weakened the financial and cultural attractiveness
            of Switzerland for immigrants from the former Yugoslavia.
            This may signal a change in the characteristics of migrants
            from the region toward higher skill levels.
How costly is it for poor farmers to
            lift themselves out of poverty
The main objective of this paper is to
            provide estimates of the cost of moving out of subsistence
            for Madagascar's farmers. The analysis is based on a
            simple asset-return model of occupational choice. Estimates
            suggest that the entry (sunk) cost associated with moving
            out of subsistence can be quite large - somewhere between
            124 and 153 percent of a subsistence farmer's annual
            production. Our results make it possible to identify farm
            characteristics likely to generate large gains, if moved out
            of subsistence, yielding useful information for the
            targeting of trade-adjustment assistance programs.
Sugar prices, labor income, and
            poverty in Brazil
This paper assesses the impact that a
            potential liberalization of sugar regimes in OECD countries
            could have on household labor income and poverty in Brazil.
            The authors first estimate the extent of price transmission
            from world markets to 11 Brazilian states to capture the
            fact that some local markets may be relatively more isolated
            from changes in world prices. They then simultaneously
            estimate the impact that changes in domestic sugar prices
            have on regional wages and employment depending on worker
            characteristics. Finally, they measure the impact on
            household income of a 10 percent increase in world sugar
            prices. Results suggest that workers in the sugar sector and
            in sugar-producing regions have better employment
            opportunities and experience larger wage increases. More
            interestingly, households at the top of the income
            distribution experience larger income gains due to higher
            wages, whereas households at the bottom of the distribution
            experience larger income gains due to movements out of unemployment.
Sugar prices, labor income, and
            poverty in Brazil
WPS 3874

# **Sugar Prices, Labor Income, and Poverty in Brazil**

Ekaterina Krivonos<sup>*</sup> Marcelo Olarreaga<sup>†</sup> This paper assesses the impact that a potential liberalization of sugar regimes in OECD countries could have on household labor income and poverty in Brazil. The authors first estimate the extent of price transmission from world markets to 11 Brazilian states to capture the fact that some local markets may be relatively more isolated from changes in world prices. They then simultaneously estimate the impact that changes in domestic sugar prices have on regional wages and employment depending on worker characteristics. Finally, they measure the impact on household income of a 10 percent increase in world sugar prices. Results suggest that workers in the sugar sector and in sugar-producing regions have better employment opportunities and experience larger wage increases. More interestingly, households at the top of the income distribution experience larger income gains due to higher wages, whereas households at the bottom of the distribution experience larger income gains due to movements out of unemployment.

## **World Bank Policy Research Working Paper 3874, April 2006**

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at_ _<u>http://econ.worldbank.org.</u>_ We are grateful to Bruce Gardner, Bernard Hoekman, Don Mitchell, Marcia Moraes, Alessandro Nicita, Guido Porto, Maurice Schiff, Thierry Verdier, Ethan Weisman, and participants at a World Bank seminar for very helpful comments and discussions.

> * University of Maryland, email: <u>ekrivonos @arec.umd.edu.</u>

> † Office of the Chief Economist for Latin America, The World Bank,, Carrera 7, #7-21, Piso 16, Bogota, Colombia, and DEPR, Long, UK. Tel. (571) 326-3600: Fax: (571) 326-3600, email: <u>molarreaga@worldbank.org.</u>
Trade liberalization and the
            environment in Vietnam
Vietnam's integration with the
            international economy has increased significantly over the
            past decade, aided by substantial liberalization of trade,
            and appears set to increase further as trade-expanding
            measures take full effect. This dramatic shift in
            Vietnam's trading patterns has important implications
            for the environment and use of natural resources. This paper
            offers a systematic analysis of the trading and investment
            patterns to give a broader understanding of the
            environmental implications of greater openness of the
            economy during the past decade. The results suggest
            increasing manufacturing and export activity in water and
            toxic pollution-intensive sectors compared with the less
            pollution-intensive sectors. The story is, on the surface,
            consistent with the changing composition of Vietnamese
            production and exports away from traditional sectors and
            toward pollution-intensive manufacturing (especially leather
            and textiles). The paper also highlights the need to
            consider strengthening environmental policies while further
            trade liberalization is being contemplated through
            Vietnam's joining of the World Trade Organization.
Rental choice and housing policy
            realignment in transition : post-privatization challenges in
            the Europe and Central Asia region
Massive privatizations of housing in
            Europe and Central Asia transition countries have
            significantly reduced rental tenure choice, threatening to
            impede residential mobility. Policymakers are intensifying
            their search for adequate policy responses aimed at
            broadening tenure choice for more household categories
            through effective rental housing alternatives in the social
            and private sectors. While the social alternative requires
            substantial and well-balanced subsidies, the private
            alternative will not grow unless rent, management, and tax
            reforms are boldly implemented and housing privatization
            truly completed.
The microeconomics of creating
            productive jobs : a synthesis of firm-level studies in
            transition economies
The challenge for labor market policy in
            the transition economies has been to redress the sharp drops
            in employment and rises in unemployment in a way that
            fosters the creation of productive jobs. The authors first
            document the magnitude and productivity of job and worker
            reallocation. Then they investigate the effects of
            privatization, product and labor market liberalization, and
            obstacles to growth in the new private sector on
            reallocation and its productivity in Hungary, Romania,
            Russia, and Ukraine. The authors find that market reform has
            resulted in a large increase in the pace of job
            reallocation, particularly that occurring between sectors
            and through firm turnover. Unlike under central planning,
            the job reallocation during the transition has contributed
            significantly to aggregate productivity growth.
            Privatization has not only stimulated intrasectoral job
            reallocation, but the reallocation is more productive than
            that among remaining state firms. The effect of
            privatization on firm productivity varies considerably
            across countries and is not always positive. The
            productivity gains from privatization have generally not
            come at the expense of workers but are rather associated
            with increased wages and employment.
Exports, university-industry
            linkages, and innovation challenges in Bangalore, India
The success of the Indian software
            industry is now internationally recognized. Consequently,
            scholars, policymakers, and industry officials everywhere
            generally anticipate the increasing competitiveness of India
            in high technology activities. Using a structural framework,
            the author argues that Bangalore's (and India's)
            information technology (IT) industry is predicated on an
            Indian business model which does not encourage thick
            institutional linkages such as those encapsulated by the
            triple helix model. Under this institutional arrangement
            there is cross-fertilization of new ideas and new modes of
            institutional interaction between industry, academia, and
            government. Though there are several hundred IT businesses
            in a milieu of numerous engineering and science colleges and
            high-end public sector research institutes, the supposed
            thick institutional architecture is in reality quite thin.
            This is due to a particular type of an export-oriented model
            which is based on off-shore development of software
            services, targeted mainly to the United States. Neither
            domestic market nor non-U.S. markets such as East Asia are
            pursued aggressively by Indian firms, which offer
            alternative forms of learning. Consequently,
            Bangalore's dynamism in the IT industry stems from
            linear and extensive growth rather than nonlinear and
            intensive growth. The author argues that Bangalore has
            serious innovation challenges with weak university-industry
            linkages, lack of inter-firm collaboration, and the absence
            of cross-fertilization between the knowledge-intensive
            defense/public sector and the commercial IT industry. To
            strengthen Bangalore's and India's innovation
            system, the Indian business model must be reformed by
            diversifying geographical and product markets, stemming
            international and internal brain drain, and contributing to
            urban infrastructure.
Firms' environmental
            performance : does news matter
The empirical literature on
            environmental performance or compliance has followed two
            strands: one based on the impact of formal regulation as a
            means of inducing better environmental performance, and
            another centered on the role of informal regulation which
            mainly emphasizes the role of communities and capital
            markets. The authors analyze the impact of environmental
            news in print media on firms' environmental
            performance. Using data from a survey of industrial
            facilities in the Republic of Korea, probit estimation
            results indicate that the publication of environmental news
            in print media and the firm's awareness of this
            publication are important predictors of a firm's
            environmental performance, more so than environmental laws,
            regulations, and environmental training. This paper thus
            reemphasizes the key role of media in influencing
            firms' environmental performance.
Comparative advantage, demand for
            external finance, and financial development
The differences in the levels of
            financial development between industrial and developing
            countries are large and persistent. Theoretical and
            empirical literature has argued that these differences are
            the source of comparative advantage and could therefore
            shape trade patterns. This paper points out the reverse
            link: financial development is influenced by comparative
            advantage. The authors illustrate this idea using a model in
            which a country's financial development is an
            equilibrium outcome of the economy's productive
            structure: financial systems are more developed in countries
            with large financially intensive sectors. After trade
            opening demand for external finance, and therefore financial
            development, are higher in a country that specializes in
            financially intensive goods. By contrast, financial
            development is lower in countries that primarily export
            goods which do not rely on external finance. The authors
            demonstrate this effect empirically using data on financial
            development and export patterns in a panel of 96 countries
            over the period 1970-99. Using trade data, they construct a
            summary measure of a country's external finance need of
            exports and relate it to the level of financial development.
            In order to overcome the simultaneity problem, they adopt a
            strategy in the spirit of Frankel and Romer (1999). The
            authors exploit sector-level bilateral trade data to
            construct, for each country and time period, a predicted
            value of external finance need of exports based on the
            estimated effect of geography variables on trade volumes
            across sectors. Their results indicate that financial
            development is an equilibrium outcome that depends strongly
            on a country's trade pattern.
Migration in towns in China, a tale
            of three provinces : evidence from preliminary tabulations
            of 2000 census
There is a concern that the growth of
            towns in China has been stalled recently and with it, the
            creation of nonfarm jobs in rural industries. The author
            uses the 2000 census tabulations to look at this issue by
            examining in-migration in towns in three provinces in
            China-Zhejiang, Henan, and Sichuan-their educational
            attainment, original place, and occupational composition. In
            addition to the diversified patterns of town in-migrants
            revealed in the three provinces, the author finds that town
            in-migrants generally possess a higher level of educational
            attainment than the local population in towns, especially in
            the less developed western and central regions. This inflow
            of human capital could foster development in towns. There is
            also evidence that as economic opportunity increases in
            towns, such as in richer coastal province of Zhejiang,
            better educated people in rural areas are likely to shift
            their jobs from the farm to the nonfarm sector in towns
            nearby, instead of leaving the countryside to migrate to
            other provinces. This could reduce migration pressure on big
            cities. Finally, the labor market in towns in the less
            developed west and central regions is more flexible in
            accommodating in-migrants, whereas in the developed province
            of Zhejiang the labor market is segregated between migrants
            and the local population.
Constraints to growth and job
            creation in low-income Commonwealth of Independent States countries
Despite sustained output growth since
            1997, low-income Commonwealth of Independent States (CIS)
            countries (CIS-7) have not experienced growth in employment,
            a phenomenon observed elsewhere in transitional economies
            and labeled as "jobless growth." The author
            addresses the causes of this phenomenon in the CIS-7. He
            argues that the lack of job creation is explained by a
            combination of structural factors, including
            capital-intensive growth, large potential for productivity
            gains among existing workers, and compartmentalized
            economies best depicted by a dual labor market framework.
            Agriculture and industry have performed asymmetrically and
            grown apart during the recession and during the growth
            periods. Agriculture provides subsistence and refuge from
            urban poverty and unemployment but is unable to grow beyond
            subsistence because it is disconnected from industrial
            manufacturing and because the agricultural infrastructure is
            depleted and underinvested. Industry has progressively lost
            its manufacturing capacity, and focuses on
            capital-intensive, highly productive sectors, and provides
            good wages for the few highly skilled workers. With
            governments and the international community currently
            refraining from investing in agricultural and industrial
            policies focused on reviving manufacturing, jobless growth
            is likely to persist.
Labor market developments during
            economic transition
The paper reviews labor market
            developments in the transition economies of Europe and
            Central Asia. It argues that the scarcity of productive job
            opportunities and the growing labor market segmentation are
            the two main labor market problems facing the transition
            economies. In the European transition economies the lack of
            jobs has led to persistent open unemployment. In the
            Commonwealth of Independent States (CIS) it has led to
            hidden unemployment (underemployment and low productivity
            employment).  Unemployment in the European transition
            economies is supported by the developed social safety net.
            In contrast, in the CIS for most workers unemployment is not
            an affordable option. They either stick to their old,
            unproductive jobs in unrestructured enterprises, or work in
            the informal sector, or resort to subsistence agriculture.
            Thus, underemployment in the CIS is a mirror image of
            unemployment in the European transition economies.
            Accordingly, the high employment-to-population ratios in
            many CIS countries do not necessarily signify favorable
            labor market performance.  Instead they often indicate
            delayed enterprise restructuring, the maintenance of
            unsustainable jobs in uncompetitive firms, and the existence
            of a large informal sector as an employer of last resort.
            Labor market segmentation has been caused by a sharp
            increase in earnings differentials and the attendant
            increase in the incidence of low-paid jobs, by the
            polarization of regional labor market conditions, and
            finally by the growth of the informal sector offering
            casual, low-productivity jobs.  Labor market segmentation
            and accompanying inequalities are more pronounced in the CIS
            than in the European transition economies.
Labor market developments during
            economic transition
WPS3894

# **LABOR MARKET DEVELOPMENTS * DURING ECONOMIC TRANSITION**

## **Jan Rutkowski**

### World Bank Policy Research Working Paper 3894, April 2006

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

*This paper was prepared as a background paper for the 2005 ECA Labor Market Study. I would like to thank Mamta Murthi for helpful comments, and Barbara Ziolkowska for preparing  the paper for publication.
International financial integration
            through the law of one price
The authors argue that the cross-market
            premium (the ratio between the domestic and the
            international market price of cross-listed stocks) provides
            a valuable measure of international financial integration,
            reflecting accurately the factors that segment markets and
            inhibit price arbitrage. Applying to equity markets recent
            methodological developments in the purchasing power parity
            literature, they show that nonlinear Threshold
            Autoregressive (TAR) models properly capture the behavior of
            the cross market premium. The estimates reveal the presence
            of narrow non-arbitrage bands and indicate that price
            differences outside these bands are rapidly arbitraged away,
            much faster than what has been documented for good markets.
            Moreover, the authors find that financial integration
            increases with market liquidity. Capital controls, when
            binding, contribute to segment financial markets by widening
            the non-arbitrage bands and making price disparities more
            persistent. Crisis episodes are associated with higher
            volatility, rather than by more persistent deviations from
            the law of one price.