Retirement Decisions in Transition: Microeconometric Evidence from Slovenia

In this article, we analyse old-age retirement decisions of Slovenian men and women, eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This unusual pattern can partly be attributed to weak incentives to work, inherent in the design of the pension system and reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We find that the probability of retirement decreases with option value to work and net wages, although the response to the former, when controlling for the latter, is rather weak. Our results also imply that less educated individuals and individuals with greater personal wealth are more likely to retire.option value; retirement decisions; transition

Estimating Explaining Reallocation's Apparent Negative Contribution to Growth

We explain a puzzle from two recent meta-analyses that cover 25 countries and claim to show that inputs systematically move from higher-value to lower-value activities despite strong aggregate labor productivity growth (ALP). These papers use variants of the Baily, Hulten and Campbell (1992) decomposition of ALP to show that the reallocation covariance term is negative in all but two countries and the reallocation between term is negative in nine countries and weakly positive in most others. We decompose ALP using three micro-level data sets from Chile, Colombia, and Slovenia and show the same puzzle holds. We show that the ALP between term can be decomposed into a term related to reallocation and a term related to the change in the total number of .ms, the latter of which often works to reduce the total between term in our data. We also show these ALP patterns can arise because of heterogeneity in labor and capital, unobserved output prices, or capacity utilization, but controlling for them only marginally helps to explain away the ALP reallocation puzzles in our micro-level data sets. We show that there is no puzzle when one decomposes aggregate productivity growth in the terms of National Accounts, as inputs in the aggregate move from low to high value activities in 36 of our 39 country-year observations. We conclude that there is a fundamental difference in re- allocation measured by the ALP decomposition and that measured by the decomposition of National Accounts growth.

Innovativeness and intangibles in transition: the case of Slovenia

The article presents the micro data on intangibles for Slovenia during the period 1994–2005 using an augmented method by Corrado et al. and analyses the role of intangibles in the Slovenian economy during the transition. By examining the organisational, information and communication technologies (ICT) and research and development (R&D) component of intangibles, we observe a decrease in the value of R&D capital that was to some extent offset by an increase in the value of ICT capital. We find that organisational workers had higher productivity than the average worker. The dynamic of change was gradual during the transition. The capitalisation of intangibles implied an average 4.5% increase of gross domestic product (GDP) for the new member states. Nonetheless, a worrying convergence can be observed between the tangible and the intangible capital. One can thus expect the intangibles have an important role in the future growth in Slovenia and across the European countries, but only if proper attention is devoted to them in terms of policy measures and regulation

Pass-on trade: Why do firms simultaneously engage in two-way trade in the same varieties?

This paper documents that a large fraction of trade flows at the firm level consists of simultaneous imports and exports in identical products, narrowly defined at the 8-digit product classification, which we call Pass-On Trade, POT. We use data on imports and exports at the firm–product level for Slovenian manufacturing firms in the period 1994-2008, to show that, on average, 70 percent of all exporting firms engage in POT. This corresponds to more than 50 percent of all exported products. Thus, imported products that are exported again by the same firm is a statistical regularity of trade of Slovenian manufacturing firms. We document that the use of POT is increasing in firm size, product diversification, multinational status as well as firm productivity and profitability. We offer and explore empirically a number of explanations for POT. Among possible explanations, we find evidence on the importance of firms’ multinational networks and demand complementarities between firms’ own and POT products. The latter confirms the theoretical explanations for ‘Carry-Along Trade’ (CAT) as developed by the recent work of Bernard et al (2010, 2012)

Innovativeness and intangibles in transition: the case of Slovenia

The article presents the micro data on intangibles for Slovenia in the period 1994–2005 using an augmented method of Corrado et al. (2005) and analyses the role of intangibles in the Slovenian economy during the transition. By examining the organizational, ICT and R&D component of intangibles, we observe a decrease in the value of R&D capital that was to some extent offset by an increase in the value of ICT capital. We find that organizational workers had higher productivity than the average worker. The dynamic of changes was gradual during the transition. The capitalization of intangibles implied an average 4.5% increase of GDP for the new member states. Nonetheless, a worrying convergence can be observed between the tangible and the intangible capital. One can thus expect the intangibles having an important role in the future growth in Slovenia and across the European countries, but only if proper attention is devoted to them in terms of policy measures and regulation

Organizational Hierarchies in the Slovenian Manufacturing Sector

We study organizational hierarchies in a transition country. Using employer-employee matched data for a set of Slovenian manufacturing firms, we find strong support for the key hypotheses of the knowledge-based hierarchies proposed by Garicano (2000) and Caliendo and Rossi-Hansberg (2012). According to these theories, firms should organize in consecutively ordered layers with less hours and higher wages in higher layers. Following Caliendo, Monte, and Rossi-Hansberg (2015b), who were the first to test the predictions of knowledge-based theories of organizational hierarchies, we are able to directly compare our results to those obtained for French manufacturing firms. We find that Slovenian firms exhibit lower consistency with consecutive ordering of organizational layers, have on average fewer organizational layers and change them less frequently. We attribute lower organizational depth to the higher wage premia to workers in higher organizational layers, which is an implication of under-investment in human capital during the socialist era

Retirement Decisions in Transition: Microeconometric Evidence from Slovenia

In this article, we analyse old-age retirement decisions of Slovenian men and women, eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This unusual pattern can partly be attributed to weak incentives to work, inherent in the design of the pension system and reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We find that the probability of retirement decreases with option value to work and net wages, although the response to the former, when controlling for the latter, is rather weak. Our results also imply that less educated individuals and individuals with greater personal wealth are more likely to retire

Retirement Decisions in Transition: Microeconometric Evidence from Slovenia

In this article, we analyse old-age retirement decisions of Slovenian men and women, eligible to retire in the period 1997-2003. In comparison to established market economies, we find relatively high hazard rates of retirement that decline with age. This unusual pattern can partly be attributed to weak incentives to work, inherent in the design of the pension system and reflected in predominantly negative values of accruals, and to transition-specific increase in wage inequality in the late 1980s and early 1990s. This is reflected in low wages and relatively high pensions of less productive (skilled) workers and vice versa. We find that the probability of retirement decreases with option value to work and net wages, although the response to the former, when controlling for the latter, is rather weak. Our results also imply that less educated individuals and individuals with greater personal wealth are more likely to retire