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351. Measuring the Pro-Poorness of Urban and Rural Economic Growth in Indonesia, 2004–2014

Author:
Takahiro Akita and Sachiko Miyata
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study measures the pro-poorness of urban and rural economic growth by region from 2004 to 2014 in Indonesia using pro-poor growth indexes, with data from the National Socio-Economic Survey (Susenas). It also conducts a probit analysis to explore the determinants of poverty. All regions (Sumatra, Java–Bali, Kalimantan, Sulawesi, and East Indonesia) experienced a substantial increase in expenditure inequality in both urban and rural areas; thus, the change in poverty incidence due to redistribution effects is positive. Apart from East Indonesia, they reduced the incidence of poverty in both areas, but their growth was not pro-poor in the strict sense. According to the pro-poor growth indexes, urban areas performed better than rural areas; in most regions, the growth of urban areas was moderately pro-poor, while that of rural areas was weakly pro-poor or anti-poor. The government needs to take urban–rural and regional differences into account when formulating poverty alleviation policies and programs since these differences would affect economic growth and changes in inequality.
Topic:
Poverty, Inequality, Economic growth, Urban, and Rural
Political Geography:
Indonesia, Asia-Pacific, and Indo-Pacific

352. Effects of Business Continuity Planning on Reducing Economic Loss due to Natural Disasters

Author:
Takahiro Ono and Venkatachalam Anbumozhi
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
The Association of Southeast Asian Nations (ASEAN) economy has developed rapidly since the 1980s, centred on the automobile industry, and has been connected to economic regions around the world, including Japan, through supply chains. However, the ASEAN region is one where natural disasters frequently occur, and a region damaged by a disaster will have an impact on the region's economy, and the region’s supply chain will have a major impact on the world.　Protecting the fast-growing and supply chain-connected ASEAN region from frequent natural disasters and reducing economic damage are important to Japan and the rest of the world. In 2015, the 3rd United Nations World Conference on Disaster Risk Reduction adopted the Sendai Framework, which focused on economic loss. To reduce economic loss caused by natural disasters, companies’ capability to continue doing business must be strengthened. Japan’s government has promoted business continuity planning to minimise economic loss. This paper examines the policy, reviews several devastating disaster case studies, and recommends policies for utilising the policy to reduce economic loss in the ASEAN region.
Topic:
Science and Technology, Natural Disasters, Business, and Supply Chains
Political Geography:
ASEAN

353. Intergenerational Transmission of Human Capital: The Case of Thailand

Author:
Sasiwimon W. Paweenawat
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This study provides evidence of intergenerational transmission of human capital in Thailand, using data from the Thailand Labor Force Survey of 1985–2017. Employing the instrumental variable approach using Thailand’s compulsory educational reform of 1978 as the instrumental variable to minimise bias caused by the endogeneity of parental education, this study estimates the effect of parental education on children’s education and their labour market outcomes. Besides reaffirming the conventional positive link between parental and children’s years of education, new and intriguing evidence is put forth on the negative link between parental education and the child’s brawn skill, based on the industry and occupation adopted by the child in the labour market. The influence of paternal education is found to outweigh that of maternal education, in contrast to the evidence from developed countries. High intergenerational educational persistence and low intergenerational mobility indicate unequal opportunities in the country, as individual welfare is largely tied to parental background. Therefore, it is recommended that the Government of Thailand weaken this linkage to improve equality in the country.
Topic:
Education, Reform, Children, and Parenting
Political Geography:
Asia and Thailand

354. he Effects of Prenatal Exposure to Plentiful Rainfall on Cognitive Development in Viet Nam

Author:
Nobuaki Yamashita and Trong-Anh Trinh
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We examine the impact of exposure to plentiful rainfall while in utero on the cognitive development of the same children from ages 5 to 15 from the Young Lives Project in Viet Nam. Using variations in the month and place of birth, we show that positive income shocks, proxied by above-average rainfall, are associated with better cognitive development up to age 8. The effect is more pronounced when positive shocks occurr early in gestation. However, we find that such positive effects are not sustained in the longer term and are completely absent at ages 10, 12, and 15. Our results call for effective and early policy interventions providing a sustained pathway for the cognitive development of children in weather disaster-prone regions.
Topic:
Environment, Natural Disasters, and Weather
Political Geography:
Asia and Vietnam

355. Determinants of School Enrolment: Relationship between Minimum Wage and Human Capital Investment

Author:
Dyah Pritadrajati
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Most economic research on minimum wage has focused on employment effects. Research analysing the effects of minimum wage on skill acquisition and educational investment is limited, especially in developing countries. To fill the gap in the literature, this paper investigates the relationship of minimum wage and human capital investment using the National Socioeconomic Survey (Susenas). This study is an effort to further analyse whether the minimum wage policy supports or even hinders recent government efforts to keep students in school. The government may be unaware of the possible interaction of different policies, especially in a developing country where inter-sectoral policy coordination is limited. This paper finds that minimum wage legislation has significant negative substitution effect on educational investment, i.e. individuals are more likely to drop out of senior secondary school due to an increase in minimum wage. There is no evidence of gender bias in human capital investment, at least as a response to increasing minimum wage. Even though the response to an increase in minimum wage amongst low-income households is positive, the results of a regression incorporating an interaction term suggest that the substitution effect is the dominant factor. Therefore, the positive result amongst low-income households might be generated by a fall in the probability of obtaining low-skilled employment that offsets the substitution effect.
Topic:
Education, Children, Human Capital, and Minimum Wage
Political Geography:
ASEAN

356. The Role of Innovation in Skill Development: Evidence from Small and Medium-Sized Enterprises in Viet Nam

Author:
Duc Anh Dang and Vuong Ahn Dang
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Using the Small and Medium Enterprise Survey in Vietnam and three proxies of innovation, we study the impact of firm innovation on on-the-job training in the manufacturing sector from 2007 through 2015. To address potential measurement errors and omitted variable problems, we use the average level of innovation in the same sector in other districts as an instrument for firms’ innovations. We find that firms provide additional training for existing workers when introducing new technology, and high-value-added firms provide additional training for existing workers. Moreover, government assistance may not be the main reason that encourages firms to provide training. The results also show that firms hire more skilled workers when implementing innovations.
Topic:
Development, Training, Innovation, and Skilled Labor
Political Geography:
Asia and Vietnam

357. Germany-Turkey Relations: It could be worse

Author:
Ekrem Eddy Güzeldere
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
Germany at the end of 2020 finds itself in an awkward position. It is hailed by President Erdogan as one of the “reasonable countries within the EU” and by Ibrahim Kalin as having “played a remarkably positive role.” Germany has “gained” this esteem because of its mediation efforts between Greece and Turkey concerning the tensions in the East Med and for avoiding harsher EU sanctions. However, concerning the clash between France and Turkey over Islam(ism) and freedom of expression, Germany cannot mediate. Similar confrontations will also occupy Germany for the years to come and the German-Turks, now almost 3 million, will be right in the centre of this confrontation.
Topic:
Foreign Policy, Bilateral Relations, Sanctions, and European Union
Political Geography:
Europe, Turkey, Germany, and Mediterranean

358. The Role of France and Germany in the Euro Area Reform

Author:
Dimitra Tsigkou
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The bilateral cooperation between France and Germany has historically played a crucial role in the European integration process. The negotiations between the two most potent European economies have profoundly influenced both the structural arrangements of the European Monetary Union (EMU) as well as the debate on its potential reform, in light of the European sovereign debt crisis. Nonetheless, these two member states have radically different stances when it comes to the strengthening of the euro area, which are related to their divergent economic philosophies. This paper draws on insights from comparative political economy literature in order to explain how the institutional features of different varieties of capitalism have led these member states to adopt divergent growth strategies while participating in the same monetary union. In this respect, it is argued that France and Germany have put forward proposals regarding the Eurozone reform effort, which reflect their endeavor to preserve their comparative institutional advantages and, ultimately, promote their own vision on the deepening of the EMU. The original contribution of this working paper is that it presents and codifies the aforementioned proposals submitted by the European Commission as well as the political views expressed by France and Germany.
Topic:
Regional Cooperation, Bilateral Relations, Reform, and European Union
Political Geography:
Europe, France, and Germany

359. Education and wage inequalities in Greece: access to higher education and its effects on income

Author:
Pery Bazoti
Publication Date:
02-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
The educational system in Greece has always been at the center of public discourse, not only for the shortcomings of its design, but also for the quality of the education offered. In this context, during the last decades, the rise in wage inequalities had led the literature to investigate the existence of a possible causal relationship between the level of education and income inequality. The present paper by Pery Bazoti examines the relationship between tertiary education and economic inequality. Taking into consideration the fact that potential inequalities in access to education can hinder the redistributive role of education, the starting point of the study is the access to tertiary education. The design and flaws of the Greek education system prevent university candidates from equal opportunities since the entrance to tertiary education institutions relies heavily on the economic background of their families. The economic crisis highlighted these inequalities mainly through the decline of the disposable household income and exacerbated the already crippled abilities of the education system due to the extensive cuts that took place during this time. Nevertheless, the data reveals that private expenditure -typically related to students’ preparation for exams for entrance into university, despite its decrease, continues to have the larger share of the households’ education budget.
Topic:
Education, Reform, Inequality, and Public Policy
Political Geography:
Europe and Greece

360. Bank recapitalizations in Greece: From state-led bailouts to the ownership transfer of banks to foreign hands

Author:
Athanasios Kolliopoulos
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
A decade after the conclusion of the first economic adjustment programme in 2010 and despite three consecutive recapitalizations, Greek banks still suffer from the highest Non-Performing Loans ratio in the Eurozone, with credit expansion in the “real economy” remaining anemic. Furthermore, the overall impact on public debt from government financial support to Greek banks over the last decade was one of the largest among the Eurozone countries. What went wrong? What were the reasons that the domestic financial system ended up in this exceptionally sad state? Why did the recapitalization policy not have the desired outcome? Exploring these questions throughout the literature of responses to banking crises, this paper shows that recapitalization policy in Greece failed to exploit the advantages of the principal forms of bank rescues. In fact, the significant inertia prevailing among authorities and bankers throughout the recapitalizations brought about the ownership transfer of the Greek banking system to foreign hands (“dehellenization”) after the third recapitalization in late 2015. You may acces the full paper by Dr. Athanasios Kolliopoulos, Postdoctoral Researcher at the Athens University of Economics and Business, here.
Topic:
Financial Crisis, Banks, Recapitalizations, Bailout, and Banking Crisis
Political Geography:
Europe and Greece