This report analyzes issues related to international migration in Armenia and its impact on Armenian households’ welfare. The report uses microdata coming from two recent household surveys, the 2017 Russian-Armenian University survey, a nationally-representative household focused on international migrants and their origin households, and the 2017 Integrated Living Conditions Survey, nationally representative household conducted by the Statistical Committee focused on welfare measurement but also with information on international migrants.
... See More + The report finds that among international migrants, there are some slight differences in the profile of permanent and temporary migrants. Permanent migrants tend to be younger, more educated and are more likely to come from secondary cities, in contrast to temporary migrants, who are a bit older, less educated and are more likely to come from rural areas. Employment prospects for both groups are very limited the moment they leave the country, with employment rates around 25 percent. They tend to migrate largely to the Russian Federation, where they are hired almost exclusively by firms in the private sector. Temporary workers overwhelming work in the construction sector, while permanent workers show more diversity in sectors of employment.
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The analysis presented in this study points to persistent and high numbers in Georgia and Armenia of youth who are jobless and/or economically inactive and with limited access to learning and/or training opportunities, and these figures are among the highest in the ECA region.
... See More + As many as 31 percent youth aged 15-29 in Georgia and 33 percent in Armenia are not in employment, education, or training (NEET). In Georgia, the phenomenon is mostly urban, whereas in Armenia it’s both rural and urban. NEET rates are consistently higher among female than male youth, pointing to the fact that being female is a risk factor itself for labor market exclusion, and gender disparities. In addition to gender gaps, there are important gender differences in the condition of those who are NEET: economic inactivity – in the form of homemaking and/or caregiving work - is the most prevalent condition among NEET women, whereas unemployment is the most common status among NEET men. With regards to education, Georgia and Armenia stand out as cases where higher educational attainment does not necessarily prevent young people from becoming NEETs, and the NEET rate among higher education graduates is even bigger (particularly among women) than for those with lower education. This is a strong sign of mismatch between the demand and supply side of labor market. The economies of these countries are not able to create an adequate supply of skilled jobs for graduates, and there is persistent subsistence low-productivity employment the agriculture sector.
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This paper uses an extended cost-benefit analysis to estimate the distributional effect of tobacco tax increases in Bosnia and Herzegovina. The analysis considers the effect on household income of an increase in tobacco prices, changes in medical expenses, and the prolongation of working years under various scenarios, based on data in three waves of the national Household Budget Survey.
... See More + One critical contribution is a quantification of the impacts by allowing price elasticities to vary across consumption deciles. The results indicate that a rise in tobacco prices generates positive income variations across the lowest income groups in the population (the bottom 20 percent). At the same time, tobacco price increases have negative income effects among middle-income and upper-income groups. These effects are larger, the higher the income level. If benefits through lower medical expenses and an expansion in working years are considered, the positive effect is acerbated among the lowest income groups. The middle of the distribution sees the income effect turn from negative to positive, and the top 40 percent, although continuing to experience a negative effect, see the magnitude of this effect diminish. Altogether, these effects mean that increases in tobacco prices have a pro-poor, progressive effect in Bosnia and Herzegovina. These results also hold within entities and across urban and rural areas.
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The people of the South Caucasus aspire for their countries to become strong middle-class societies, and they are on track to make that aspiration a reality.
... See More + Two decades of social and economic progress have changed the societies of Armenia, Azerbaijan, and Georgia. The notable improvements that people in the region have experienced are reflected in better living standards that allowed poverty to be reduced by half in the 12 years between 2005 and 2017. Yet, to consolidate middle-class societies, the governments of the South Caucasus need to do more to achieve the stability and resilience enjoyed by their more advanced peers in Europe and Central Asia. Sustainable economic growth, poverty reduction, and shared prosperity require that the full potential of all geographical and administrative areas, population groups, and economic sectors be realized. This boo analyzes spatial, social, and economic mobility in the South Caucasus. The book argues that Armenia, Azerbaijan, and Georgia have not yet integrated important geographical areas and population segments in full economic participation and social development. Economic gains have not been uniformly and equitably translated into greater welfare and opportunity among all households and individuals. The main conclusion is that sustainable growth, poverty reduction, and the consolidation of the middle class require that the institutional and physical foundations of greater and more equitable economic and social mobility be secured in the South Caucasus. Understanding and removing the constraints to the development of lagging districts; leveraging opportunities for agglomeration; linking geographical areas, peoples, and markets; fostering equality in access to better jobs; and making sure that high-quality education and basic services are available to all individuals and areas are crucial.
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Poverty mapping has a huge potential to improve geographical policy targeting and to enable efficient resource allocations. The approach has been developed and used as a policy tool in more than 60 countries worldwide.
... See More + This joint work between the Georgia Statistical Office and the World Bank is the first attempt in Georgia to estimate poverty beyond the regional level and rural-urban disaggregation. The objective of this note is to motivate and initiate the discussion on the production of the poverty maps and its potential usage as a policy tool in Georgia. To do this, the note presents the results based on the two major methodologies used in this area of research: (i) the unit-level approach, also known as Elbers, Lanjouw and Lanjouw methodology, and (ii) the area-level approach, also known as Fay-Herriot methodology. The note also describes differences in methodologies applied, provides robustness checks and possibilities in refining the analysis, and discusses some limitations and potential bias in the data used. The document includes technical discussions in a concise and accessible manner, so it can also serve as a guidance for economist and statistical practitioners who conduct the exercise.
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There is considerable public concern about the level of household indebtedness in Georgia. The new regulation expected to come into force on November 1, 2018 addresses this concern by enforcing the responsible credit framework targeting commercial banks.
... See More + The objective of this note is twofold. First, the note presents micro-level evidence using the nationally representative household survey to understand households’ borrowing patterns with supporting evidence from perceptions surveys. Second, the note examines plausible causal effects of over-indebtedness on household’s welfare. This paper is structured as follows. Section 2 provides macroeconomic indicators and findings from perception survey as the background evidence. Section 3 illustrates the prevalence of borrowing among the households and identifies type of households that borrow from different sources. Section 4 shows results from the causal impact analysis of bank loans on household welfare. Section 5 concludes with directions for future research.
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This paper presents a comprehensive analysis of economic and social mobility in countries in the South Caucasus by complementing available household survey data in each of the countries in the subregion with other sources, such as the Life in Transition Survey (2016).
... See More + The first part of the paper -- concentrated on intragenerational mobility -- finds that despite progress made in reducing poverty over the past decade, there appears to be a significant amount of churning around the poverty line. Moreover, in Georgia and Armenia, roughly one in eight individuals lived in a state of chronic poverty in 2015, and in the case of Georgia, chronic poverty is not an exclusive phenomenon for rural areas. In addition, although social programs have provided a lifeline for the chronic poor, the ability to tap into labor market opportunities has been the ticket out of poverty. The second part of the paper expands the analysis to intergenerational or social mobility. The main findings are that (1) a higher proportion of the population in this subregion considers their pre-transition family life and the lives of their parents when they were of similar age as appropriate benchmarks to evaluate their current economic situations in comparison with the other transition countries, and (2) over half of the Georgian and Armenian population disagreed with the statement that asked their views on having a better in life than their parents, aligning with the “growing but unhappy” trend that has been reported for the region.
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Policy Research Working Paper WPS8329 FEB 05, 2018
This paper presents a comprehensive analysis of economic and social mobility in countries in the South Caucasus by complementing available household survey data in each of the countries in the subregion with other sources, such as the Life in Transition Survey (2016).
... See More + The first part of the paper, concentrated on intragenerational mobility, finds that despite progress made in reducing poverty over the past decade, there appears to be a significant amount of churning around the poverty line. Moreover, in Georgia and Armenia, roughly one in eight individuals lived in a state of chronic poverty in 2015, and in the case of Georgia, chronic poverty is not an exclusive phenomenon for rural areas. In addition, although social programs have provided a lifeline for the chronic poor, the ability to tap into labor market opportunities has been the ticket out of poverty. The second part of the paper expands the analysis to intergenerational or social mobility. The main findings are that (1) a higher proportion of the population in this subregion considers their pre-transition family life and the lives of their parents when they were of similar age as appropriate benchmarks to evaluate their current economic situations in comparison with the other transition countries, and (2) over half of the Georgian and Armenian population disagreed with the statement that asked their views on having a better in life than their parents, aligning with the ‘growing but unhappy’ trend that has been reported for the region.
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Working Paper (Numbered Series) 125622 JAN 01, 2018
In addition to its impact on economic growth and macroeconomic stability, fiscal policy affects the distribution of income across households and individuals through the use of taxes and expenditures.
... See More + As a result, policy makers and development partners are likely to be interested in the answers to, among others, the following questions: what is the combined impact of taxes and transfers on poverty and inequality?; how progressive or regressive are different fiscal interventions, and what are their contributions to the overall impact?; what is the distributive efficiency of the existing fiscal package?; what is the distributional impact of a particular policy reform?; and what are the characteristics of net payers into and net beneficiaries from the fiscal package? The World Bank has partnered with the Commitment to Equity (CEQ) Institute at Tulane University to answer these questions using the Institute’s comprehensive fiscal incidence diagnostic tool. This tool - the CEQ assessment is designed to assess how taxation and public expenditures affect the income of different households, individuals, and socioeconomic groups as well as the distribution of income across the entire population. This volume presents a set of studies for low- and middle-income countries that use the CEQ approach to examine the distributional effects of individual taxes, transfers, and subsidies as well as their combined impact. The studies presented in this volume are part of a larger research effort led by Tulane’s CEQ Institute in collaboration with the World Bank and other institutions aimed at increasing the information available on fiscal incidence in developing countries. To the extent that these assessments provide an evidence base for and bring an equity lens to the decision-making process surrounding tax and spending policy reforms, they will be valuable to both policy makers and development practitioners.
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Despite significant improvements in per capita expenditures and a marked decline in poverty over the 2000s, a large fraction of Eastern Europe and Central Asia's population reports their economic situation in the late 2000s to be worse than in 1989.
... See More + This paper uses data from the Life in Transition Survey to document the gap between objective and subjective economic mobility and investigate what may drive this apparent disconnection. The paper aims at identifying some of the drivers behind subjective perceptions of economic mobility, focusing on the role of perceptions of fairness and trust in shaping people's perceptions of their upward or downward mobility. The results show that close to half of the households in the region perceive to have experienced downward economic mobility, that is, that their position in the income distribution has deteriorated. The results also show that perceptions of higher inequality, unfairness, and distrust in public institutions are associated with downward subjective economic mobility. The findings from this study confirm that factors beyond objective well-being are associated with the perceptions of mobility observed in Europe and Central Asia and may explain why the region has had such a pessimistic view of economic mobility during the past two decades. Understanding what drives people's perceptions of their living standards and quality of life is important, because regardless of objective measures, perceptions could influence people's behavior, including support for reforms and labor market decisions. For Eastern Europe and Central Asia, a region that has undergone substantive transformations and which is still going through a reform process, accounting for these aspects is critical.
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Policy Research Working Paper WPS7519 DEC 18, 2015
Despite significant improvements in per capita expenditures and a marked decline in poverty over the 2000s, a large fraction of Eastern Europe and Central Asia's population reports their economic situation in the late 2000s to be worse than in 1989.
... See More + This paper uses data from the Life in Transition Survey to document the gap between objective and subjective economic mobility and investigate what may drive this apparent disconnection. The paper aims at identifying some of the drivers behind subjective perceptions of economic mobility, focusing on the role of perceptions of fairness and trust in shaping people's perceptions of their upward or downward mobility. The results show that close to half of the households in the region perceive to have experienced downward economic mobility, that is, that their position in the income distribution has deteriorated. The results also show that perceptions of higher inequality, unfairness, and distrust in public institutions are associated with downward subjective economic mobility. The findings from this study confirm that factors beyond objective well-being are associated with the perceptions of mobility observed in Europe and Central Asia and may explain why the region has had such a pessimistic view of economic mobility during the past two decades. Understanding what drives people's perceptions of their living standards and quality of life is important, because regardless of objective measures, perceptions could influence people's behavior, including support for reforms and labor market decisions. For Eastern Europe and Central Asia, a region that has undergone substantive transformations and which is still going through a reform process, accounting for these aspects is critical.
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Working Paper (Numbered Series) 125439 DEC 01, 2015
This report is the second edition in series of economic updates designed to monitor and assess recent developments in Georgia. It presents a concise overview of macroeconomic, political and structural indicators during the first half of 2015 and situates them in the context of Georgia’s evolving external environment.
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This assessment presents a broad picture of the main gender disparities in Bosnia and Herzegovina (BiH) in endowments, economic opportunities, and agency.
... See More + The report builds on the framework of the 2012 World Bank World Development Report 2012 on gender and development and the World Bank’s regional gender report on Europe and Central Asia: opportunities for men and women, that focuses on the household and individual members’ bargaining power and their ability to access (i) endowments, education, health and physical assets, (ii) economic opportunities, labor market, employment, entrepreneurship, and (iii) agency, political participation and voice, gender-based violence, and the legal framework. The remainder of the report is organized as follows. The next subsections provide general patterns of gender gaps across socio-demographic groups. Chapter one discusses ‘agency’ and describes factors which may shape the process how men and women use their endowments and utilize economic opportunities to achieve desired outcomes. Chapter two, in turn, analyzes gender disparities in endowments, such as health and education. Chapter three focuses on gender gaps in the labor market, entrepreneurship and earnings, access to finance and poverty. The last section, chapter four, presents conclusions and policy recommendations.
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Women in Development and Gender Study 97640 MAY 01, 2015
The present work is based on an analysis performed in-situ by World Bank staff on the offices of the FYR Macedonian SSO, given the restricted-access policy for the data.
... See More + The analysis is expected to be updated in June 2015 with information from the 2012 and 2013 SILC, which will allow for a richer analysis, particularly in terms of time trends. The analysis presented here, however, is considered valuable in that it provides first insights into the socio-demographic characteristics of the bottom of the income distribution and the interactions between different measures of poverty. The poverty and inequality statistics are complemented with socioeconomic characteristics of the poor and the bottom 40 percent2, an analysis of the sources of income at the household level, and an international benchmarking of poverty in FYR Macedonia. Finally, this note benchmarks the poverty measurement currently used in FYR Macedonia, the At-Risk-of-Poverty and Social Exclusion (AROPE), with other measurements of poverty based on different poverty lines, which allows for a better understanding of the policy implications of transitioning the new ways of measuring poverty. The following section presents recent poverty and inequality indicators for FYR Macedonia. Section three delineates a poverty profile for the poor and the bottom 40, and analyzes the sources of income for FYR Macedonian households. Section four benchmarks the country with other countries, based on poverty and AROPE indicators, and examines the overlap between the AROPE and its components with other methodologies of identifying the less well-off. Section five concludes.
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Working Paper 97645 MAY 01, 2015
Cancho,Cesar A.; Markozashvili,Darejani; Dávalos, María E.Disclosed
This assessment presents a broad picture of the main gender disparities in Bosnia and Herzegovina (BiH) in endowments, economic opportunities, and agency.
... See More + The report builds on the framework of the 2012 World Bank World Development Report 2012 on gender and development and the World Bank’s regional gender report on Europe and Central Asia: opportunities for men and women, that focuses on the household and individual members’ bargaining power and their ability to access (i) endowments, education, health and physical assets, (ii) economic opportunities, labor market, employment, entrepreneurship, and (iii) agency, political participation and voice, gender-based violence, and the legal framework. The remainder of the report is organized as follows. The next subsections provide general patterns of gender gaps across socio-demographic groups. Chapter one discusses ‘agency’ and describes factors which may shape the process how men and women use their endowments and utilize economic opportunities to achieve desired outcomes. Chapter two, in turn, analyzes gender disparities in endowments, such as health and education. Chapter three focuses on gender gaps in the labor market, entrepreneurship and earnings, access to finance and poverty. The last section, chapter four, presents conclusions and policy recommendations.
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Women in Development and Gender Study 97640 MAY 01, 2015
Substantial upward economic mobility in the majority of countries in Europe and Central Asia in the 2000s translated into achievements in reducing poverty and boosting shared prosperity.
... See More + Although factors associated with upward mobility vary significantly by country, education and jobs undoubtedly play an important role in lifting households out of poverty and helping them to improve their living standards. This study finds there is a puzzling mismatch between the objective economic mobility patterns observed in survey data and people's subjective perception of their mobility. A majority of people in the region perceives they are worse off economically than in the past and voice frustration over limited opportunities to improve their lives. This disconnect is partly explained by increased inequality in the region, an increasing sense of unfairness in the processes to move up, and a more marked sense of insecurity and vulnerability. Although the region has been making headway in lifting households out of poverty, ensuring sustainable progress toward poverty reduction and shared prosperity requires policies that promote human capital accumulation, foster job creation, and offer adequate protection to improve households' resilience to shocks.
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Policy Research Working Paper WPS7173 JAN 01, 2015
Creating more and better jobs is perhaps the most critical challenge to boosting shared prosperity in Europe and Central Asia (ECA). This report examines the role of reforms, firms, skills, incentives and barriers to work, and labor mobility through the lens of two contextual factors: the legacy of centralized planned economies and the mounting demographic pressures associated with rapid aging in some countries and soaring numbers of youth entering the workforce in others.
... See More + The main findings of the report are: 1) market reforms pay off in terms of jobs and productivity, although with a lag; 2) a small fraction of superstar high-growth firms, largely young, account for most of new jobs created in the region; 3) skills gaps hinder employment prospects, especially of youth and older workers, due to the inadequate response of the education and training systems to changes in the demand for skills; 4) employment is hindered by high implicit taxes on work for those transitioning to formal jobs from inactivity or unemployment and barriers that affect especially women, minorities, youth, and older workers; and 5) low internal labor mobility prevents labor relocation to places with greater job creation potential.
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Publication 84041 MAR 01, 2014
Arias Diaz,Omar S.; Cancho,Cesar A.; Davalos,Maria Eugenia; Gruen,Carola A.; Saiovici,Gady; Sanchez,Carolina; Santos,Indhira Vanessa; Tiongson,Erwin H. R.; De Andrade Falcao,NatashaSerbianDisclosed
Creating more and better jobs is perhaps the most critical challenge to boosting shared prosperity in Europe and Central Asia (ECA). This report examines the role of reforms, firms, skills, incentives and barriers to work, and labor mobility through the lens of two contextual factors: the legacy of centralized planned economies and the mounting demographic pressures associated with rapid aging in some countries and soaring numbers of youth entering the workforce in others.
... See More + The main findings of the report are: 1) market reforms pay off in terms of jobs and productivity, although with a lag; 2) a small fraction of superstar high-growth firms, largely young, account for most of new jobs created in the region; 3) skills gaps hinder employment prospects, especially of youth and older workers, due to the inadequate response of the education and training systems to changes in the demand for skills; 4) employment is hindered by high implicit taxes on work for those transitioning to formal jobs from inactivity or unemployment and barriers that affect especially women, minorities, youth, and older workers; and 5) low internal labor mobility prevents labor relocation to places with greater job creation potential.
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Publication 84041 JAN 21, 2014
Arias Diaz,Omar S.; Cancho,Cesar A.; Davalos,Maria Eugenia; Gruen,Carola A.; Saiovici,Gady; Sanchez,Carolina; Santos,Indhira Vanessa; Tiongson,Erwin H. R.; De Andrade Falcao,NatashaDisclosed
Creating more and better jobs is perhaps the most critical challenge to boosting shared prosperity in Europe and Central Asia (ECA). This report examines the role of reforms, firms, skills, incentives and barriers to work, and labor mobility through the lens of two contextual factors: the legacy of centralized planned economies and the mounting demographic pressures associated with rapid aging in some countries and soaring numbers of youth entering the workforce in others.
... See More + The main findings of the report are: 1) market reforms pay off in terms of jobs and productivity, although with a lag; 2) a small fraction of superstar high-growth firms, largely young, account for most of new jobs created in the region; 3) skills gaps hinder employment prospects, especially of youth and older workers, due to the inadequate response of the education and training systems to changes in the demand for skills; 4) employment is hindered by high implicit taxes on work for those transitioning to formal jobs from inactivity or unemployment and barriers that affect especially women, minorities, youth, and older workers; and 5) low internal labor mobility prevents labor relocation to places with greater job creation potential.
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Publication 84041 JAN 01, 2014
Arias Diaz,Omar S.; Cancho,Cesar A.; Davalos,Maria Eugenia; Gruen,Carola A.; Saiovici,Gady; Sanchez,Carolina; Santos,Indhira Vanessa; Tiongson,Erwin H. R.; De Andrade Falcao,NatashaRussianDisclosed
