15 research outputs found

    Welfare Disparities in Transition Economies: Case of Estonia

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    The purpose of the article is to analyze the changes in income distribution in transitional societies and show the impact of income disparities on economic growth and social development. Particularly the article analyses the income differences by the sectors and regions of Estonia. A decade ago substantial disparities in income were considered mainly as a problem of developing countries. In communist societies income distribution was considerably more equal despite the fact that average income level was much lower than in the Western welfare states. The situation in the former communist countries significantly changed after reforms began in the early 90s, when a large differentiation by income and wealth rapidly took place. Theoretically, the uneven income distribution has been considered as a supportive factor to economic growth. Recent empirical research (as well as the analyses done by the authors) generally does not confirm that. The authors emphasize that considerable differences in income are considered as "unfair" by large groups of the population. The result might be destabilization in society and low economic growth. Also a human factor plays a more important role than it was assumed earlier. In fact, high technology transfers to the transitional countries support economic growth. However, production efficiency cannot be achieved without a highly qualified and motivated labor force. Large differences in income often benefit a limited number of highly qualified professionals but ruin the morale and eventually qualifications of large groups of employees. As a conclusion, the transitional economies have to decrease income and regional disparities to maintain sustainable growth.

    Sectoral Structure and GDP: is there a Remarkable Relationship in the Case of the Estonian Counties

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    The paper aims to offer some empirical insights into regional disparities in sectoral structure and GDP per capita in the case of the Estonian counties. In order to elaborate on the aggregated indicators of the Estonian counties’ sectoral structure and to explore the relations between sectoral structure and GDP per capita as a proxy of economic wealth, the method of principal component in combination with regression analysis is applied. The results of empirical analysis confirm the validity of the hypothesis that regional disparities in GDP per capita are remarkably affected by the sectoral structure of the counties’ economy. Additionally to sectoral structure, the location of a county, measured by the distance between the capital city and counties’ centre, has a significant impact on GDP per capita. There is a coreperiphery structure with high income levels in the capital region (Harjumaa) and low income levels in peripheral regions. The divergence in regional GDP levels may indicate the concentration of production inputs and development of sectoral structure in regions, where economies are functioning more efficientl

    Level of Living and Well-being as Measures of Welfare: Evidence from European Countries

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    The aim of the present study is to elaborate generalized indicators describing objective and subjective aspects of welfare and analyze the relationships between them based on the sample of European countries. While applying the quality of life approach we differentiate economic, human capital, social capital and emotional aspects of welfare. With help of confirmatory factor analysis generalized objective level of living and subjective well-being indicators to measure all mentioned aspects will be composed. Our results show that in countries with objectively lower positions the subjective assessments on welfare tend to be higher. Although an ideal situation could be imagined where objective and subjective assessments were equal, there are deviations from the equilibrium to both directions

    Sissejuhatus majandusteooriasse

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    Kopeerimine ja printimine lubatudhttp://www.ester.ee/record=b2073058*es

    WELFARE CHANGES IN EASTERN EUROPEAN AND CENTRAL ASIAN TRANSITION ECONOMIES

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    This paper investigates the regularities of the transition processes in countries at different levels of transformation from 1994–1998. Twenty-four countries are involved into the analysis and the indicator of welfare is used for analysis. Welfare is measured by the production of gross product per capita, which is adjusted with purchasing power parity (GDP-PPP). The 24 countries will be divided into three groups according to the level of transformation, using the canonical discriminant analysis. The basis of the analysis will be the transition index computed by EBRD. For each group, a component analysis related to various economic indicators will be used. From the results, four transition components will be formed. The effect of the obtained transition components on welfare will be examined with the help of regression analysis, the results of which are the basis for interpreting the causes of welfare changes. The paper concludes that the main factor determining welfare is the development level of a country. Other factors have less influence.

    Mikroökonoomika

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    Kopeerimine keelatud, printimine lubatudhttp://www.ester.ee/record=b2208407*es

    Sectoral Structure and GDP: is there a Remarkable Relationship in the Case of the Estonian Counties

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    The paper aims to offer some empirical insights into regional disparities in sectoral structure and GDP per capita in the case of the Estonian counties. In order to elaborate on the aggregated indicators of the Estonian counties’ sectoral structure and to explore the relations between sectoral structure and GDP per capita as a proxy of economic wealth, the method of principal component in combination with regression analysis is applied. The results of empirical analysis confirm the validity of the hypothesis that regional disparities in GDP per capita are remarkably affected by the sectoral structure of the counties’ economy. Additionally to sectoral structure, the location of a county, measured by the distance between the capital city and counties’ centre, has a significant impact on GDP per capita. There is a coreperiphery structure with high income levels in the capital region (Harjumaa) and low income levels in peripheral regions. The divergence in regional GDP levels may indicate the concentration of production inputs and development of sectoral structure in regions, where economies are functioning more efficientl
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