Roswitha M. King

Does More Schooling Make You Run for the Border? Evidence from Post-Independence Kosovo

Abstract Does an extra year of schooling augment ones propensity to migrate? In a naive regression, which does not account for the potential reverse causality and omitted variables, the coefficient of education is likely to be biased. To deal with the problems of endogeneity, we use parental education as an instrument for own education. The data come from a survey on preparedness to emigrate from Kosovo, carried out in the summer of 2008. Two-stage residual inclusion multinomial probit results suggest that an extra year of education increases the probability of taking concrete steps to realise migration intentions by up to 9 percentage points.

From immigrants to (non-)citizens: political economy of naturalisations in Latvia

We study the determinants of the willingness to acquire citizenship of Latvia by ‘non-citizens’ – the former Soviet migrants and their descendants born on the territory of Latvia. The country of Latvia serves as an instructive laboratory for the analysis of naturalisations: due to the centrally planned nature of its 1945–1991 immigration flows, we can exclude the possibility that migrants came with an intention to acquire host country citizenship. Using data from a 2007 survey of 624 former and current ‘non-citizens’, we find that the elderly, males, single, and those with poor knowledge of the State language are less willing to naturalise. Prospective emigrants are more likely to have naturalised recently in preparation for partaking in the wider EU labour market - a right that citizenship of EU member Latvia conveys. Instrumental variable analysis suggests that low level of education is an obstacle for acquiring citizenship, while higher unemployment rate and lower share of non-citizens at a respondent’s place of residence contributes to early naturalisations.JEL codesF22, J15, J61

Inflation in Latvia

This paper applies and extends the Scandinavian model of inflation for analyzing determinants of inflation in Latvia during the period 1996-2007. Until the outbreak of the financial crisis in 2007, high inflation was a persistent problem for advocates of Latvian participation in the Euro collaboration. By allowing for transitional effects and separating the impact of nominal and real factors on inflation, where real factors are related to the structural shifts at the heart of transition economies, we render the inflation history more understandable. We show that the effects accompanying real factors constitute the key component of overall inflation over the twelve-year period of observation, keeping nonstructural inflation below the Maastricht criteria for most of the period. The real contribution of real factors to inflation provides Latvia with better prospects for future growth and higher standards of living, and hence should be less worrisome than the nominal contribution. Still, when it comes to compliance with the Maastricht criteria, the Economic and Monetary Union makes no distinction between the two, complicating convergence for transition economies.

Industrial structure and jobless growth in transition economies

Abstract When does employment growth mirror aggregate growth? Applying a two sector model, where productivity growth differs across sectors of production, this article is concerned with a feature characterising a number of transition economies: a divergence between production and employment growth. In our framework the industrial structure that allows employment growth to mirror output growth is endogenous, and related to a number of industry- and economy-wide characteristics. The article shows how the critical industrial structure necessary for avoiding ‘jobless growth’ is context-specific, questioning a ‘one size fits all’ policy approach when aiming to fulfil the Europe 2020 Strategy.

How to Cut the Seigniorage Cake into Fair Shares in an Enlarged EMU

The European Central Bank redistributes each year seigniorage from issuing euro notes to the National Central Banks of the euro countries. The key for this redistribution is, from 2008, based on the respective GDP and population proportions of the euro countries. Applying the distribution formula to the new EU countries from central and eastern Europe seems to give these countries a large net benefit compared with the seigniorage they bring in, i.e. their share of currency in circulation. However, as argued in this article, currency demand in the new EU member countries is expected to increase relative to the present group of euro countries - especially after gaining membership in the EMU because of integration of the financial markets and, in the longer term, catching-up growth. Hence, it is doubtful whether a large unintended redistribution of seigniorage to the benefit of acceding EMU countries will materialize in the future. Copyright (c) 2007 The Author(s); Journal compilation (c) 2007 Blackwell Publishing Ltd.