Location: Global
The Economics of Air Pollution
The FREE Network together with the Stockholm Institute of Transition Economics (SITE) invites academics to join a full day workshop session on the economics of air pollution at the Stockholm School of Economics (SSE). The workshop will provide presentations of the latest research on the economics of air pollution and will provide an in-depth look at how to conduct research on the topic.
Workshop
The workshop will consist of two elements:
- (1) a session with paper presentations, and
- (2) tutorials from invited experts in the field.
The tutorials will provide an in-depth look at how to conduct research on the topic of air pollution, covering issues related to data collection and data sources, methodology, statistical analysis, and interpretation of results. The workshop will provide presentations of the latest research but also give detailed guidance to economists interested in doing their own research on the topic.
Special Guests
Registration
Attend in person?
The event will take place in room Ragnar at SSE, Bertil Ohlins gata 5, 113 50 Stockholm. Please register via the Trippus platform (here).
Attend online?
The event will also be streamed online via the Zoom platform for those who cannot join the event in person. Please register via the Trippus platform (here). A confirmation email will be sent to you within a few minutes. If you have not received the confirmation email within 10 minutes, please check your SPAM folder. Please contact site@hhs.se if you have any questions regarding the event.
Program
08:45 Registration outside room Ragnar
09:00-09:10 Welcome address by Julius Andersson, SITE
09:10-09:55 Claudia Persico, American University
09:55-10:15 Coffee break (Outside room Ragnar)
10:15-11:00 Marion Leroutier, Misum
11:00-12:00 Paper presentations I
- “Saving lives with cooking gas? Unintended effects of targeted LPG subsidies in Peru” by Thomas Thivillon, Paris Dauphine University
- “Displacing Congestion: Evidence from Paris” by Lea Bou Sleiman, CREST Ecole Polytechnique
12:00-13:00 Lunch (Outside room Ragnar)
13:00-15:00 Paper presentations II
- “Heterogeneous Effects of Air Pollution on Physical Tasks: Evidence from Amateur Track and Field” by Francesco Granella, Bocconi University
- “Air Pollution and Job Search Behaviour” by Mariët Bogaard, Maastricht University
- “Cycling toward cleaner cities? Evidence from New York City’s Bike Share Program” by Vincent Thorne, Trinity College
- “The Impact of Local Pollution Exposure on Hospital Admissions: Case of Lisbon Metropolitan Area” by Mariia Murasheva, Nova School of Business and Economics
15:00-15:30 Coffee break (Outside room Ragnar)
15:30-17:00 Sefi Roth, London School of Economics
About FREECE
In 2021 the FREE Network initiated the Forum for Research on Eastern Europe: Climate and Environment (FREECE). The long-run goal of FREECE is to provide guidance for policymakers in the region on how to promote economic development that is environmentally sustainable.
- Learn more about the FREE Network
Disclaimer: Opinions expressed during events and conferences are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Personality Traits, Remote Work and Productivity
The Covid-19 pandemic generated a massive and sudden shift towards teleworking. Survey evidence suggests that remote work will stick in the post-pandemic period. The effects of remote work on workers’ productivity are however not well understood, some workers gaining in productivity whereas others experience the opposite. How can this large heterogeneity in workers productivity following the switch to teleworking be explained? In this brief, we discuss the importance of personality traits. We document strong links between personality, productivity, and willingness to work from home in the post-pandemic period. Our results suggest that a one-size-fits-all policy regarding remote work is unlikely to maximize firms’ productivity.
Introduction
The Covid-19 pandemic triggered a large and sudden exogenous shift towards working from home (WFH). Within a few months in Spring 2020, the share of remote workers increased from 8.2 percent to 35.2 percent in the US (Bick et al., 2020), and from 5 percent to more than 30 percent in the EU (Sostero et al., 2020). Surveys of business leaders suggest that WFH will stick in the post-pandemic period (e.g., Bartik et al., 2020).
The prevalence of teleworking will ultimately depend on its impact on workers’ productivity and well-being. This impact however remains ambiguous, some studies reporting an overall positive impact, some studies a negative one. Overall, the balance of these pros and cons can vary greatly across individuals. The existing literature emphasizes the importance of gender and occupation for workers’ productivity under WFH arrangements, but a large share of this heterogeneity remains unexplained.
In a recent paper (Gavoille and Hazans, 2022) we investigate the link between personality traits and workers’ productivity when working from home. Importance of non-cognitive skills, in particular personality traits, for individual labor market outcomes is well documented in the literature (e.g., Heckman et al., 2006; Heckman and Kautz, 2012). In the context of WFH, soft skills such as conscientiousness or emotional stability, are good candidates for explaining heterogeneity in relative productivity at the individual employee level.
The Latvian context provides an ideal setup for studying the effect of teleworking on productivity. First, Latvia has a large but unexploited potential for teleworking. Dingel and Neiman (2021) estimate that 35 percent of Latvian jobs could be done remotely, which is about the EU average. However, prior to the pandemic only 3 percent of the workforce was working remotely – one of the smallest figures in the EU. Second, the Latvian government declared a state of emergency in March 2020, which introduced compulsory WFH for all private and public sector employees, except for cases where on-site work is indispensable due to the nature of the work. This led to a six-fold increase in the share of remote workers within a couple of months. This stringent policy constitutes a massive exogenous shock in the worker-level adoption of WFH, well suited for studying.
Survey Design
To study the link between personality traits, teleworking, and productivity, we designed an original survey, implemented in May and June 2021 in Latvia. The target population was the set of employees who experienced work from home (only or mostly) during the pandemic. To reach this population, we used various channels: national news portals, social media (Facebook and Twitter) and radio advertisement. More than 2000 respondents participated in the survey, from which we obtained more than 1700 fully completed questionnaires.
Productivity and Remote Work
In addition to the standard individual characteristics such as age and the likes, we first collect information about respondents’ perception of their own relative productivity at the office and at home. More specifically, we ask “Where are you more productive?”. The five possible answers are “In office”, “In office (slightly)”, “No difference”, “At home (slightly)” and “At home” (plus a sixth answer: “Difficult to tell”). Table 1 provides a description of the answers. Roughly one third of the respondents reports a higher productivity at home, another third a higher productivity at the office, and one third do not report much of a difference. This measure of productivity is self-assessed, as it is the case with virtually any “Covid-19-era” paper on productivity. Note however that our question is not about absolute productivity as such, but relative productivity of teleworking in comparison with productivity at the office, which is arguably easier to self-assess.
Second, we ask “Talking about the job you worked at mostly remotely, and taking into account all difficulties and advantages, what would you choose post-pandemic: working from home or in office for the same remuneration (if you had the choice)?” The five possible answers are “Only from home”, “Mostly from home”, “Indifferent”, “Mostly in office”, “Only in office” (and a sixth option: “Difficult to tell”). The main aim of this question is to study who would like to keep working remotely in the post-pandemic period, irrespective of productivity concerns. Notably, the answers are much different than from the productivity question (see Table 1), which suggests the latter does not reflect preferences.
Finally, we ask respondents about the post-pandemic monthly wage premium required by the respondent to accept i) working at the office for individuals preferring to work from home; ii) working from home for individuals preferring to work at the office. Median values of these premia for workers with different preferences are reported in Table 1 (panel C). These values appear to be economically meaningful both in absolute terms and relative to the median net monthly wage in Latvia (which was 740 euro in 2021), reinforcing the reliability of the survey.
Table 1. Outcome variables
Source: reproduced from Gavoille and Hazans (2022).
Measuring Personality Traits
The survey contains a section aiming at evaluating the personality of the respondent through the lens of the so-called Five Factor Model of Personality. The psychometrics literature offers several standardized questionnaires allowing to build a measure for each of these five factors – Openness to Experience, Agreeableness, Extraversion, Emotional Stability and Conscientiousness. We rely on the Ten-Item-Personality-Inventory (TIPI) measure (Gosling et al., 2003). This test is composed by only ten questions, making it convenient for surveys, and it has been widely used, including in economics. As simple as this approach seems, the performance of this test has been shown to be only slightly below those with more sophisticated questionnaires, and to provide measures highly correlated with the existing alternative measures of personality traits.
Results
Overall, the results indicate that personality traits do matter for productivity at home vs. at the office. The personality trait most strongly related to all three outcome variables is Conscientiousness. Controlling for a battery of other factors, individuals with a higher level of conscientiousness are reporting a higher productivity when working from home as well as a higher willingness to keep working from home after the pandemic. This link is not only statistically significant but also economically meaningful: an individual with a level of conscientiousness in the 75th percentile is 8.4 percentage points more likely to report a higher productivity from home than a similar individual in the 25th percentile. Considering that the sample average is 31 percent, this difference is substantial.
Previous studies documented a positive correlation between Conscientiousness and key labor market outcomes such as wage, employment status and supervisor evaluation. A usual concern of employers is a possible negative selection of workers in teleworking. Observing that highly conscientious workers are more willing to work from home, where they are more productive, suggests that firms do not need to exert a very strict control on employees choosing to telework.
Openness to Experience shows a similar positive relationship with productivity. Extraversion on the other hand is only weakly negatively related to productivity. The relationship between this trait and willingness to work from home is however much stronger. These findings are intuitive: workers with a high Openness to Experience are more likely to cope easily with the important changes associated with switching to WFH. On the other hand, extravert individuals may find it more difficult to remain physically isolated from colleagues.
The literature studying the relationship between WFH and productivity suggests a conditional effect based on gender. In parallel, the literature investigating the role of personality traits on labor market outcomes also documents gender-specific patterns. As our work builds on these two strands of literature, we provide a heterogeneity analysis of the personality traits/productivity relationship conditional on gender.
When disaggregating the analysis by gender, it appears that the relationship between personality traits and productivity is stronger for women than for men. Conscientiousness and (to a smaller extent) Openness to Experience have a strong positive relationship with relative productivity of teleworking for women, while Extraversion and Agreeableness feature economically meaningful negative relationships. Noteworthy, the effects of Agreeableness and Openness to Experience do not concern the probability to be more productive at the office but only the willingness to work from home after the pandemic. For men, only Conscientiousness is significant, with a much smaller magnitude than for women.
Conclusion
We document that personality traits matter for changes in productivity when switching to a WFH regime. In particular, individuals with high levels of Conscientiousness are much more likely to report a better productivity from home than from the office. Additionally, Openness to Experience and Extraversion also do play a role.
Taken together, these results suggest that a one-size-fits-all policy is unlikely to maximize neither firms’ productivity nor workers’ satisfaction. It also highlights that when estimating firm-level ability in switching to remote work, characteristics of individual workers should be considered. In particular, employers practicing remote work should invest in socialization measures to compensate the negative effect of teleworking on the wellbeing of more extravert workers. Finally, several surveys (e.g., Barrero et al., 2021) document that more than a third of workers in the US would start looking for a new job allowing (some) work from home if their current employer would impose a strict in-office policy. Our results support this finding but also indicate that the opposite also holds: some workers would strongly oppose to remaining in a WFH setup after the pandemic. Personality traits are important determinants of the value attached to working from home.
Acknowledgement
This research is funded by Iceland, Liechtenstein and Norway through the EEA Grants. Project Title: The Economic Integration of the Nordic-Baltic Region through Labour, Innovation, Investments and Trade (LIFT). Project contract with the Research Council of Lithuania (LMTLT) No is S-BMT-21-7 (LT08-2-LMT-K-01-070).
References
- Barrero, J. M., Bloom, N. and Steven, D. (2021). Why working from home will stick, NBER Working Paper 28731.
- Bartik, A., Cullen, Z., Glaeser, E., Luca, M. and Stanton, C. (2020). What jobs are being done at home during the COVID-19 crisis? Evidence from firm-level surveys, NBER Working Paper 27422.
- Bick, A. and Blandin, A. (2021). Real-time labor market estimates during the 2020 coronavirus outbreak.
- Dingel, J. and Neiman, B. (2021). How many jobs can be done at home?, Journal of Public Economics, 189, 104235.
- Gavoille, N. and Hazans, M. (2022). Personality traits, remote work and productivity, IZA Discussion Paper 15486.
- Gosling, S., Rentfrow, P. and Swann, W. (2003). A very brief measure of the Big-Five personality domains. Journal of Research in personality, 37(6), pp. 504-528.
- Heckman, J., Stixrud, J. and Urzua, S. (2006). The effects of cognitive and noncognitive abilities on labor market outcomes and social behavior, Journal of Labor economics, 24(3), pp. 411-482.
- Heckman, J. and Tim Kautz. (2012). Hard evidence on soft skills. Labour Economics, 19(4), pp. 451-464.
- Sostero, M., Milasi, S., Hurley, J., Fernandez-Macias, H. and Bisello, M. (2020). Teleworkability and the COVID-19 crisis: a new digital divide?, JRC Working Papers Series on Labour, Education and Technology, No. 2020/05.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Belarus Under War Sanctions
Numerous developed countries have imposed tough sanctions on Belarus, as the Belarusian regime has become part of the Russian aggression against Ukraine. At the same time, economic relations with Ukraine have been disrupted. These shocks have simultaneously disturbed the Belarusian economy and triggered a severe recession. Thanks to several positive effects from the external environment, some success from measures undertaken by the authorities to stabilize output, and some degree of resilience – all seasoned with a large portion of good luck – the situation of the Belarusian economy is however “not that bad”. Nonetheless, the Belarusian economy is experiencing its worst economic crisis since the mid-1990s, and the current path of the economy is highly unstable and associated with numerous risks and threats. In economic terms, it is likely the case that the full costs from the sanctions are yet to be paid.
Sanctions, Multiple Shocks and Their Potential Implications
As the Belarusian regime has become part of the Russian war on Ukraine many developed countries have adopted tough sanctions against Belarus. These sanctions include an embargo on a large share of Belarusian exports and imports, prohibitions and restrictions on transportation of goods of Belarusian origin, restrictions on and/or blocking actions regarding financial operations and settlements, a freeze of parts of the Belarusian international reserves, and numerous restricting and blocking actions against banks, companies and individuals. Such sanctions, combined with a new external environment, cause powerful indirect effects with foreign companies exiting the Belarusian market and refusing business with Belarusian counterparts. Additionally, some Belarusian businesses and employees have left the country. On top of this, economic relations with Ukraine, formerly Belarus’s second largest trading partner, have been virtually reduced to zero.
In economic terms, the above mentioned may be treated as a bundle of simultaneous powerful shocks to the national economy, differing in direction, mechanics, size, and persistence. These shocks may be grouped into three clusters.
The first cluster covers demand shocks, and in particular export shocks. According to our assessments, the exogenous demand shock following the sanctions may reduce Belarusian exports (in physical terms) by 40 percent, compared to previous steady-state levels. This figure should however be seen as a potential lower bound which may be realized if no measures to mitigate the impact from the sanctions are undertaken. Belarusian authorities and businesses are however doing their best trying to find new buyers for the “vanishing” exports, bypass restrictions in order to connect to “old” buyers, and establish new logistic and financial chains. The extent to which these attempts may be successful depends on the global environment, the degree of the price competitiveness of Belarusian producers, and numerous non-economic factors. Additionally, all factors affecting exports are unstable and volatile. Exports under these new conditions are therefore less sustainable and may fluctuate in an extremely wide range. Shocks to consumption and investments stemming from weakened sentiment and expectations further amplify the demand shocks.
The second cluster of shocks relates to the supply side of the economy. It includes business closures, emigration that weakens labor supply, and production bottlenecks due to the inaccessibility of imports. Supply shocks are hard to quantify, but we perceive them as persistent and cumulative. Business closures and emigration have irrevocable effects on the national economy (at least in the medium-term), and a continuation of such drop-outs will likely amplify the size of the shock.
The third cluster combines different primarily nominal shocks: price, exchange rate, financial stability and fiscal ones. Such shocks have become permanent companions to the Belarusian economy under the sanctions, and they are volatile in terms of size. As a result, the corresponding economic indicators are likely to also become highly unstable.
This bundle of adverse shocks shifts the economy down from the previous, close to steady-state, trajectory. A new trajectory is however far from predetermined. Firstly, it depends on the effectiveness of the government in curbing the shocks stemming from the sanctions, as the actual path of the economy may be considerably affected by monetary or fiscal policy and other interventions. Secondly, some positive exogenous shocks may partially offset the effects from adverse ones. Lastly, the economy, at least for a while, may resist through exploitation of accumulated buffers (such as, international reserve assets, financial reserves of State-owned enterprises that were accumulated under favorable conditions in 2021 etc.).
Considering the worst possible assumptions regarding the above mentioned issues, our model-based simulations predict a severe recession of about 20 percent (as compared to the output peak in 2021-Q2). This recession is accompanied by a sharp increase in inflation (which in turn is highly likely to be supplemented by a full-fledged financial crisis). This simulation should however be regarded as the potential rock bottom. Whether it will become reality or not critically depends on the Belarusian government’s policies.
Policy Response by the Authorities
The root cause of the problem, namely the provision of Belarusian territory for the Russian army, has never been publicly discussed by Belarusian officials. Instead, the government has focused on strategies which treat the symptoms, rather than focusing on curing the disease itself. The main coping strategies that were publicly discussed include: 1) expected increase in Russian support and exports to Russia 2) re-orientation of exports towards Asian and developing markets 3) greater mobilization of domestic resources and 4) monetary, fiscal and other stimuli.
The Russia-related initiatives are often beyond convention and include some radical proposals. These are, for instance, accelerating the establishment of sea terminals in Russian ports, promoting exports to Russia, and requesting greater financial support from Russia linked to the so-called “deep integration” package (mainly in the form of energy subsidies, import substitution investments and direct subsidies). Adherence to these proposals would mean that Belarusian authorities de facto accept serving as a Russian protectorate and correspondingly take on the role of a puppet government.
Belarusian authorities have reached some success from choosing the “Russian track” as the debt payments to Russia were postponed, new cheap gas and oil prices were granted and export to Russia increased by 15 percent in the first 8 months of 2022. The Belarusian regime’s $7 billion compensation claim for incurred economic losses due to the war has however been rejected by Russia so far.
The coping strategy of export re-orientation serves primarily as a rhetoric intervention as China and other Asian countries considered by the government cannot fully replace the European market. For many Belarusian exports, the EU was a premium, high-margin market while re-orientation means at best lower margins. The success of re-orientation depends on the degree of price competitiveness, which can change greatly over time. The only success from this strategy to date is the re-orientation of 10 percent of potash exports to China via railroad (incurring greater transportation costs).
The third strategy “greater mobilization of domestic resources” firstly assumes more interference with the business activity of State-owned enterprises (SOE). Despite severe demand shocks these are pressured by the government to maintain production and/or salaries, the latter in order to support output via sustained consumer demand. Further, a “discipline” component of the strategy is implemented through renewed catch-pay-and-release practices. In effect, businessmen are arrested based on anti-corruption or tax fraud criminal charges. They are then offered to pay certain amounts to the state and released if they choose to pay.
Since late spring, when direct financial shocks have been suppressed, the authorities have intensified stimulus measures to the economy. In the fiscal sphere, these are aimed at promoting exports and mainly provided on an individual or sectoral basis. To a large extent, these stimuli may be seen as partial compensation to SOEs for their output-supporting role. In the monetary sphere a specific environment in which the Russian ruble is appreciated vs. the US dollar, despite the worldwide strength of the latter, has allowed the authorities to implement a “magic” (but highly likely temporary) solution: The Belarusian national currency is manipulated to depreciate vs. the Russian ruble (both in nominal and real terms) but appreciate vs. the US dollar. The former leads to a great increase in price competitiveness (as Russia is today the dominant trading partner), while the latter serves as a buffer for fragile prices and provides financial stability. Moreover, the authorities have excessively softened monetary policy, trying to spur domestic credit. These measures lead to heightened inflation pressure, which is however somehow suppressed by reinvigorated direct price controls.
Current Situation and Future Implications
Until now, the Belarusian economy places far from the potential rock bottom. By the end of the second quarter in 2022, output losses (vs. the output peak in 2021-Q2) amounted to about 5.5 percent. By the end of 2022, they are however expected to increase to about 8.5 percent (vs. the 2021-Q2 output peak). The Belarusian economy is stuck in a heightened inflation environment – with the inflation being as high as 20 percent in annual terms. Although the inflation is considerably higher than in “normal times”, it is still not a disaster (considering the much higher projected level under the worst-case scenario and the background of 40-year peak in global inflation). Moreover, the current situation is still far from a full-fledged financial crisis, despite some financial turbulence.
The position of the economy as “not that bad”, is a result of existing buffers, positive effects from the external environment and some immediate efficiency from actions undertaken by the authorities to stabilize output – all seasoned with a large portion of good luck. For instance, the jump in price competitiveness accounts for a large share of curbing efforts that counter the sanctions. This is, in turn, due to a combination of high global prices, low and frozen energy prices for Belarus, and a very specific and unstable stance on monetary policy underpinned by direct price controls. Some buffer savings that Belarusian SOEs succeeded to accumulate during the period of the so-called “foreign trade miracle” in late 2020 and 2021 also play an important role. Last but not least, the Belarusian authorities seem to have succeeded in the partial curbing of the export shock. Since the beginning of summer, there are some signs of recovery in exports which most likely reflects a partial recovery of exports within the most sensitive domains: oil products and potash fertilizers (corresponding statistics have been blocked out).
However, the “not that bad” position of the economy does not mean good. According to all standard metrics, Belarus is currently experiencing a severe economic crisis. The notion that it could be even more severe is bad news, not good ones. Moreover, the current situation is extremely unstable and fragile. The economy is facing numerous distortions, contradictions and risks, all of which can still shift the scenario of the crisis from the “not that bad” situation to the worst possible.
Conclusion
The Belarusian regime’s involvement in the Russian aggression against Ukraine have propelled Belarus into the most severe economic crisis since the mid-1990s. Until recently, fortunate external economic circumstances, a specific policy mix and a good portion of luck have allowed for a partial mitigation of the crisis. The situation is however extremely unstable and the full effects from the sanctions are likely yet to be realized.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
The Cost of Climate Change Policy: The Case of Coal Miners
The phasing out of coal is considered a key component of the upcoming energy transition. While environmentally appealing, this measure will have a devastating effect on those working in the coal industry. Using the dissolution of the UK coal industry under Margret Thatcher as a natural experiment, we estimate the long run costs of being displaced as a coal miner. We find that within the first year of displacement, earnings fall by 80-90 percent, relative to the earnings of a carefully matched blue-collar manufacturing worker, while the wages of miners who find alternative employment fall by 40 percent. The losses are persistent and remain significant fifteen years after displacement. Our results are considerably above the estimates provided by other studies in the job displacement literature and may serve as a guide for policy makers when aiming for a just energy transition.
The Coal Mining Industry and Global Warming
According to the recent IPCC report, limiting global warming to 2 degrees Celsius requires a near complete and rapid elimination of coal in the global use of energy. Such a drastic measure is bound to have devastating effects on anybody economically linked to and dependent on the coal industry. Our back-of-the-envelope calculation suggests that the closure of the currently 2300 active industrial coal mines would translate into more than 5 million displaced coal miners. In Figure 1 we plot the spatial distribution of coal mines, indicating the locations of the upcoming displacements globally.
Figure 1. Location of industrial coal mines. The seven biggest producers and exporters of coal are marked in green.
Source: SNL Energy Data Set produced by S&P Global.
In a new paper (Rud et al., 2022), we estimate the average loss in the earnings of coal miners who have been displaced following one of the most notorious labor disputes of the 20th century: the dissolution of the coal sector in the UK. When Margaret Thatcher came into power many of the mines were unprofitable (Glyn, 1988). Considering the mines to be ripe for closures, the UK government publicly announced the closure of 20 mines in 1984. After additional information on further closures reached the press, the Union of Miners called for a general strike. The strike lasted for nearly a year and ended with a devastating defeat of the miners. From 1985 and onwards, the closure of mines proceeded at such an incredible pace that the dissolution of the UK coal industry is considered the most rapid in the history of the developed world (Beatty and Fothergill, 1996). As shown in Figure 2, the closures resulted in an equally rapid displacement of miners, from 250 000 employed miners in 1975 to less than 50 000 by 1995.
Figure 2. Coal Mining Employment in the UK 1975-2005
Note: The number on employed miners is collected from National Coal Board (1970-1993) and used in Aragon et al., (2018). The percent of employment shown on the right axis was calculated from the New Earnings Survey, the main data source used in this paper.
The Effects of UK Coal Mine Closures on Miners
At the heart of our empirical analysis is the New Earnings Survey, a longitudinal dataset covering 1 percent of the UK population since 1975. For the period 1979-1995 (marked in gray in Figure 2), among the 25-55 years old and those who were employed by the same mine for at least two consecutive years, we identify 2152 miners who experienced a final separation from a mine. In our baseline specification, these miners are matched to a single manufacturing worker using a large array of observables such as age, gender, hours worked, pre-separation employment and earnings, geographical administrative unit (county), as well as whether their respective wage was determined in a collective agreement. By the nature of the exercise we are unable to match on industry and instead match on detailed occupational information. A variety of other matching procedures suggest our results are robust.
In Figure 3 we plot the estimated differences in the evolution of earnings and wages for four years before, and fifteen years after displacement. The coefficients are estimated conditional on time and individual fixed effects. Due to the normalization of the dependent variable, the estimates should be interpreted as the percentage change relative to pre-displacement values. In Panel A of Figure 3 we show that hourly wages and weekly earnings conditional on employment drop by around 40 percent in the year after displacement and recover only slowly. It should be noted that the losses in earnings conditional on employment are not driven by changes in hours since the two series are close to identical.
In Panel B of Figure 3 we show the effect on earnings taking into account the losses of those who have not been successful in finding alternative employment in another industry. To get to these results we need to make some assumptions since the New Earnings Survey neither includes earnings information on the self-employed, nor on those who are active in the informal sector. Many other studies in the job displacement literature share similar data limitations, so we follow their approach in dealing with these. On the one hand, we assume zero individual earnings for periods without any observed labor earnings in the data, as assumed by Schmieder et al. (2022) and Bertheau et al. (2022). This assumption does not appear too strong since there is some evidence suggesting that ignoring the self-employed only marginally affects the results (Upward and Wright, 2017; Bertheau et al., 2022). On the other hand, we complement our results with an approach inspired by Jacobson (1993) where we keep only individuals who experience positive earnings within four years after displacement. The latter approach provides a more conservative estimate of displacement costs by assuming zero earnings only for individuals who eventually return to work.
Figure 3. The hourly wage and earnings conditional on employment (Panel A), and overall earnings costs of final displacement from a mine (Panel B).
Note: We plot the coefficients of the estimated panel data model with time and individual fixed effects and distributed leads and lags. ”Earnings: come back” refers to the treatment group where we only include those who have positive earnings at some point four years after job loss, and impute periods without employment as zeros. ”Earnings: all zeros” refers to the treatment in which we replace the earnings of any miner with a zero if the miner is not observed for any year, without restrictions.
Interpreting all periods of missing information as zeros, we find the initial losses to be around 90 percent of pre-displacement earnings within the first year after separation, while the more conservative estimates are only slightly lower at around 80 percent in the short run. In the long run, the losses are persistent and remain significantly depressed even fifteen years after displacement. Over the fifteen years after displacement these numbers amount to the miners losing on average between 4 to 6 times of their pre-displacement earnings. This implies that miners only receive 40-60 percent of the present discounted counterfactual earnings.
Our estimates are considerably above those provided by studies in the job displacement literature that focus on mass layoffs. Couch and Placzek (2010), for instance, report initial losses to amount to about 25-55 percent, while Schmeider et al. (2022) find initial earnings losses to be around 30-40 percent. Davis and Wachter (2012) estimate the long-run effects based on US data and find the present discounted earnings losses to be on average 1,7 times the workers’ pre-displacement earnings.
The large estimated individual costs to the displaced miners are likely due to a combination of at least two reasons. First, the complete collapse of the sector forces displaced miners to reallocate and search for another job in other industries, and likely other occupations. Since coal mining is a highly specialized occupation, this greatly reduces miners’ ability to transfer the accumulated human capital to another activity (Beatty and Fothergill, 1996; Samuel, 2016). Second, most coal miners are employed in remote and rural areas where mining is often the main employer, something which remains an issue for current miners around the world (see Figure 1). This feature reduces local economies’ capacity to absorb displaced miners after a mine closure and, due to the need to relocate, greatly increases workers’ job searching costs.
Conclusion
While it is important to globally transition away from the excessive use of fossil fuels, we should keep in mind the devastating effects such transition will end up having on some groups. And while coal miners are particularly vulnerable to the upcoming energy transition, the ramifications do not stop there. Individuals employed in industries linked to the coal industry are likely to also be affected by its dissolution. Moreover, individuals employed in industries providing local services, such as retail stores, restaurants and pubs are likely to experience a significant drop in demand. Thus, the impact of coal mine closures on coal dependent communities typically goes far beyond the displacement of miners (Aragon et al., 2018). The closure of mines will lead to spikes in local unemployment, often unregistered (“hidden”), as well as an exodus of the population. Estimating and accounting for these effects is important if we aim to provide a just energy transition for all.
Attempts have been made to foster economic recovery of affected communities. Regeneration policies have included re-training of local workers, support of small and medium-sized businesses, and investments in local infrastructure, among others. However, their success has been limited and former mining communities remain among the poorest in the UK (Beatty et al., 2007). Preparing a set of policies which will have the capacity to reduce the costs of the transition, as not to repeat the devastating experience of UK coal miners and their communities, is an important task ahead of current policy makers.
References
- Aragon, F., Rud, J. P. and Toews, G. (2018). Resource shocks, employment, and gender: Evidence from the collapse of the UK coal industry. Labour Economics, 52, pp. 54–67.
- Beatty, C. and S. Fothergill. (1996). Labour market adjustment in areas of chronic industrial decline: the case of the UK coalfields. Regional studies, 30(7), pp. 627–640.
- Beatty, C., Fothergill, S. and Powell, R. (2007). Twenty years on: has the economy of the UK coalfields recovered? Environment and Planning A, 39(7), p. 1654.
- Bertheau, A. Maria Acabbi, E., Barceló, C., Gulyas, A., Lombardi, S. and Saggio R. (2022). The unequal consequences of job loss across countries. American Economic Review: Insights. Forthcoming.
- Couch, K. and Placzek, D. (2010). Earnings losses of displaced workers revisited. American Economic Review, 100(1), pp. 572–589.
- Davis, S. and von Wachter, T. (2012). Recessions and the cost of job loss. Brookings Papers on Economic Activity.
- Glyn, A. (1988). Colliery results and closures after the 1984–85 coal dispute. Oxford Bulletin of Economics and Statistics, 50(2), pp. 161–173.
- Jacobson, L., Lalonde, R. and Sullivan, D. (1993). Earnings losses of displaced workers. American Economic Review, 83(4), pp. 685–709.
- Rud, J. P., Simmons, M., Toews, G. and Aragon, F. (2022). Job displacement costs of phasing out coal. IFS Working Paper, 22/37.
- Schmieder, J., von Wachter, T. and Heining, J. (2022). The Costs of Job Displacement over the Business Cycle and Its Sources: Evidence from Germany. Mimeo.
- Upward, R. and Wright, P. (2017). Don’t look down: The consequences of job loss in a flexible labour market. Economica, 2019(86), pp. 166–200.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Sanctions Enforcement and Money Laundering
With sanctions becoming an increasingly important tool in ostracising autocratic regimes from western markets, the need for effective enforcement of Anti-Money Laundering (AML) policies is increasing. The global AML regime will be the backbone in detecting evasion of sanctions. This regime has, however, been widely criticised as ineffective. In this brief, we discuss issues with the current AML regime and propose a reward scheme for whistleblowers to enable asset seizures. A powerful feature of our proposal is that it does not rely on the effectiveness of the AML regime.
Introduction
Before Russia’s invasion of Ukraine, we wrote a FREE Policy brief expressing concerns over the ability of the current Anti Money Laundering (AML) regime to keep money launderers out of the international financial system. In the brief, we concluded that “The ease with which criminals have evaded present detection methods should cause concern about the effectiveness of sanctions”. The issue has now received renewed attention as the current sanctions against Russia will only be effective if it is difficult or costly to circumvent them. Sanctions evasions have a lot of similarities with money laundering, and the methods for detecting both is very similar, such that the proposal we discuss in this brief is applicable to both.
While an initial shock due to unexpected sanctions may generate disruptions, prohibited goods can later be imported/exported through third-party intermediaries in non-sanctioned countries to circumvent the sanctions. False labelling of origin, misinvocing, etc., are likely to occur and may be very difficult to detect. Analogously, sanctioned individuals’ assets may shift hands, and be laundered through shell companies without known beneficial owners.
In this brief, we consider a way to enhance enforcement, as outlined in a recent paper (Nyreröd, Andreadakis, and Spagnolo, 2022). The approach builds upon the US Kleptocracy Asset Recovery Rewards Program which offers up to $5 million “for information leading to seizure, restraint, or forfeiture of assets linked to foreign government corruption” (US Treasury, 2022).
The AML Regime
To justify the enforcement mechanism we later propose, some background on the AML regime is necessary. The global standard-setter for AML is the Financial Action Taskforce (FATF), which has since 1989 issued recommendations to countries on how to combat money laundering and terrorist financing. While initially focusing on drug money, the regime expanded in the last decades and has now received increased attention as it will be an important tool in ensuring sanctions against Russian oligarchs are effective.
The regime imposes numerous obligations on financial and other entities as they must assess risks and conduct due diligence along various dimensions, collect documents, and send reports to the national Financial Intelligence Unit. This regime has been widely criticized. Widespread AML non-compliance within banks, lack of rigorous supervision and enforcement by national supervisors and high costs relative to verifiable benefits are some of the issues that have been identified (Spagnolo and Nyreröd 2021; Nyreröd, Andreadakis and Spagnolo, 2022). The World Bank estimates that between 2 and 5 percent of global GDP is laundered annually, and that only around 0.2 percent of the proceeds from crime, laundered via the financial system, are seized and frozen (UNODC, 2011). Researchers have also been critical – for example Pol (2020), cites 22 papers that have “identified gaps between the intentions and results of the modern anti-money laundering effort, including its core capacity to detect and prevent serious profit-motivated crime and terrorism” (p.103).
Recent responses by the European Commission and others have focused on ensuring compliance within covered entities. Yet, increasing compliance with current AML rules may be costly and non-sufficient to stem the flows of illicit money in the international system. Even if widespread compliance within covered entities is obtained, and the AML procedures are effective, this may not be enough – even minimal non-compliance rates may result in major damages. We have seen how Danske Bank Estonia, a relatively small branch, managed to transfer around $230 billions of suspicious funds within the span of a couple of years (Bruun and Hjejle, 2018).
Some have suggested providing whistleblower rewards to those who report significant violations of AML rules by covered institutions (Spagnolo and Nyreröd, 2021; Scarcella, 2021). Yet, such rewards are only desirable if the AML regime is effective in achieving its policy objectives, which is not a given (we elaborate on this in Nyreröd, Andreadakis and Spagnolo, 2022). Enhanced compliance with the AML regime does not necessarily entail increased detection and deterrence of e.g., money laundering. Numerous laundering methods exist that circumvent the reporting rules required under AML. A better option may be to incentivize facilitators of money laundering to provide information leading directly to asset seizures, as they have the best information that can lead to such forfeitures.
Incentivizing Facilitators
Money laundering is a derivative crime and requires what is called a “predicate offense” (such as human trafficking, drug sales, or corruption) that generates illegal money whose source needs to be obscured. The EU Directive (2018/1673) stipulates 22 categories of criminal activities that constitute predicate offenses.
There is a large infrastructure facilitating money laundering including financial advisers, real estate agents, tax advisors, and lawyers – crucial to criminals seeking to launder money. Bill Browder, famous for his work on advocating the Magnitsky Act, describes how he was aided by Alexander Perepilichnyy, a financial adviser for individuals involved in a large tax theft in Russia. Perepilichnyy helped launder the money for those involved in the tax theft, but eventually turned whistleblower when he provided bank statements to Browder that led to the freezing of $11 million related to this fraud (Browder 2022, p. 39). His information provided a “road-map” to even be able to start investigating where the illegally stolen assets had ended up. Perepilichnyy later died while jogging near London in 2012, which some believe was a murder in retaliation for blowing the whistle. A reward scheme would aim at people like Perepilichnyy, persons who are unrelated to the predicate offense, yet have information on the source and location of illicit funds.
Reward Programs in AML
The US has used whistleblower reward schemes in several regulatory areas including tax, procurement fraud, and securities fraud. These programs offer 10-30 percent of the recoveries or fines to whistleblowers that bring information crucial to issue the fines or recover public funds. Rewards to whistleblowers are therefore paid by the wrongdoing party, not the taxpayer.
These programs have received increased attention as several studies have found that they are effective at uncovering and deterring wrongdoing (Dyck, 2010; Wiedman and Zhu, 2018; Raleigh, 2020; Leder-Luis, 2020; Dey et al., 2021; Berger and Lee, 2022, see Nyreröd and Spagnolo, 2021 for a review). Agencies managing these programs have widely praised them, and studies show they are highly cost effective. More countries are also starting to experiment with offering rewards for information.
A salient feature of the US programs is that some degree of culpability in the wrongdoing does not disqualify an individual from an award. In 2012, Bradley Birkenfeld received $104 million under the Internal Revenue Service’s reward program despite serving a jail sentence for his involvement in facilitating tax evasion. In fact, when one of the most effective and famous whistleblower laws was enacted, the US Senator who tabled the bill argued that the bill aimed at “setting a rogue to catch a rogue” which “is the safest and most expeditious way I have ever discovered of bringing rogues to justice” (Howard, 1863).
Motivated by these experiences, we propose that AML should incorporate a whistleblower reward scheme, targeting those facilitating money laundry, with three central pillars:
Witness protection: aim at shielding whistleblowers and their families from negative consequences, if there are concerns that they might become victims of retaliation, harassment, or mistreatment of any kind. If the whistleblower is based in a hostile country, guaranteed asylum should be granted.
Leniency: offer immunity for any reported offense related to money laundering, but not for any other crime. Without immunity, a whistleblower will have no incentive to turn to authorities as they would immediately incriminate themselves and risk jailtime for money laundering.
Large, scaling, and mandatory rewards: offer large, mandatory rewards that scale with the level of recoveries. As noted above, successful US programs pay 10-30 percent of the recoveries to whistleblowers. In the money laundering case, this percentage range may be lowered. Also, similarly to whistleblowers’ rewards in other cases, AML rewards would come from confiscated funds.
Numerous other design dimensions are important, but due to space limitations we refer the reader to other lengthier pieces that go into further detail (Nyreröd, Andreadakis and Spagnolo, 2022; Spagnolo and Nyreröd, 2021; Nyreröd and Spagnolo, 2021; Engstrom 2018).
Conclusion
The Russian aggression against Ukraine and the subsequent sanctions have put increased emphasis on the ability and effectiveness of the current AML regime to detect money laundering. Justified concerns about this regime have been raised, and its performance record is still under question. Programs offering whistleblowers witness protection, leniency, and large rewards could be an effective complement to this regime.
References
- Berger, P. and Lee, H. (2022), “Did the Dodd-Frank Whistleblower Provision Deter Accounting Fraud?”, Journal of Accounting Research, early view, available at: https://doi.org/10.1111/1475-679X.12421
- Browder, B. (2022b). Freezing Order, Simon & Schuster, New York, NY.
- Bruun and Hjejle. (2018). “Report on the Non-Resident Portfolio at Danske Bank’s Estonian Branch”. Danske Bank.
- Dey, A., Heese, J. and G. Pérez-Cavazos. (2021). “Cash-for-Information Whistleblower Programs: Effects on Whistleblowing and Consequences for Whistleblowers”, Journal of Accounting Research, Vol. 59, No.5, pp.1689-1740.
- Dyck, A., Morse, A. and Zingales, L. (2010). “Who Blows the Whistle on Corporate Fraud?”, The Journal of Finance, Vol. 65, No.6, pp.2213-2253.
- Engstrom, D. (2018). “Bounty Regimes.” In Arlen, J. (ed.) Research Handbook on Corporate Crime and Financial Misdealing, Edward Elgar.
- Howard, J.M. (1863). Congressional Globe, Senate, 37th Congress, 3rd Session, pp. 955-956.
- Leder-Luis, J. (2020). “Whistleblowers, Private Enforcement, and Medicare Fraud”, Working Paper, Massachusetts Institute of Technology, available at: https://sites.bu.edu/jetson/files/2020/07/False-Claims-Act-Paper.pdf.
- Nyreröd, T. and Spagnolo, G. (2021). “Myths and numbers on whistleblower rewards”, Regulation and Governance, Vol. 15, No.1, pp.82-97.
- Nyreröd, T., Andreadakis, S. and Spagnolo, G. (2022). “Money laundering and sanctions enforcement: large rewards, leniency, and witness protection for whistleblowers”, The Journal of Money Laundering Control, early view available at: https://www.emerald.com/insight/content/doi/10.1108/JMLC-05-2022-0068/full/html
- Pol, R. (2020). “Responses to money laundering scandal: evidence-informed or perception-driven?”, Journal of Money Laundering Control, Vol.23, No.1, pp.103-121.
- Raleigh, J. (2020). “The Deterrent Effect of Whistleblowing on Insider Trading”, University of Minnesota Working Paper, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3672026.
- Scarcella, G. (2021). “Qui Tam and the Bank Secrecy Act: A Public-Private Enforcement Model to Improve Anti-Money Laundering Efforts”, Fordham Law Review, Vol. 90, No.3, pp.1359- 1395.
- Spagnolo, G. and Nyreröd, T. (2021). “Financial Incentives to whistleblowers: a short survey”, Sokol, D. and van Rooij, B. (Ed.), Cambridge Handbook of Compliance, Cambridge University Press, Cambridge UK, pp.341-351.
- Spagnolo, G. and Nyreröd, T. (2021a). “Money Laundering and Whistleblowers”, report written for Centre for Business and Policy Studies (SNS), available at: https://snsse.cdn.triggerfish.cloud/uploads/2021/11/money-laundering-and-whistleblowers.pdf.
- UNODC. (2011). “Estimating Illicit Financial Flows Resulting from Drug Trafficking and Other Transnational Organized Crimes”, Research Report, United Nations Office on Drugs and Crime, available at: https://www.unodc.org/documents/data-and-analysis/Studies/Illicit-financial-flows_31Aug11.pdf.
- US Treasury. (2022). “U.S. Departments of Treasury and Justice Launch Multilateral Russian Oligarch Task Force”, March 16, available at: https://home.treasury.gov/news/press-releases/jy0659.
- Wiedman, C. and Zhu, C. (2018). “Do the SEC Whistleblower Provisions of Dodd-Frank Deter Aggressive Financial Reporting?”, 2018 Canadian Academic Accounting Association Annual Conference, available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3105521.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Higher Education and Research in times of War and Peace: Key Insights from the 2022 FREE Network Conference
More than thirty years after the collapse of the Soviet Union, Europe is struck with war following the Russian aggression on Ukraine. Russia’s war on Ukraine entails lost human capital, both in actual lives lost and due to major disruptions to key functions of the society, such as education and research. In light of this, the FREE Network, together with the Centre for Economic Analysis (CenEA) and the Stockholm Institute of Transition Economics (SITE), hosted the public conference “Higher Education and Research in War and Peace“ in Warsaw on the 10th of September 2022. This policy brief is based on the presentations and panel discussions held during the conference.
The large-scale Russian invasion of Ukraine has disrupted an entire society, including the education system, with Ukrainian schools just recently partially welcoming back students to the classrooms for the first time since the 25th of February 2022. Closing schools has severe impacts on a population, as highlighted by the recent Covid-19 pandemic. The lockdown and closure of schools around the world following the virus have had and will continue to have massively negative consequences globally, with severe losses in human capital due to lost years of education. This is especially in countries where access to online education is limited or of poor quality. Inequalities also rise following the closure of schools and girls return to school in fewer numbers than their male counterparts. The disruption to the Ukrainian education system will result in lost human capital and lowered levels of knowledge among the population. The war has further restricted access to relevant information for many Ukrainians but also for Russians, making people susceptible to the increased Russian propaganda and misinformation about the war on Ukraine depicted within and outside of Russia.
In light of this, the FREE Network gathered representatives from its affiliated institutions and other relevant actors in the region to discuss the relevance and necessity of continued support for higher education and research within social sciences in Ukraine, and more broadly in Eastern Europe and post-Soviet countries. The conference and the overarching theme related back not only to the original ambition of the FREE Network, namely to support outstanding academia within economics and relate it to policy work but also to the current situation in Europe and the existing threat from Russia to this objective.
This brief will initially cover the work carried out by the Kyiv School of Economics (KSE) in response to the Russian aggression, followed by thoughts on Russia’s role in the evolution of knowledge and human capital in the region. The brief continues by covering the benefits and positive outcomes of investments into education and research and lastly concludes with reflections on the role of the FREE Network.
The Kyiv School of Economics’ Response to the Russian Aggression
The war on Ukraine put the spotlight on the importance of high-quality academic institutions as a safety net for the government to maintain vital functions to society. The Vice President for Policy Research at KSE, Nataliia Shapoval, gave a brief overview of how KSE’s work has changed since the Russian war on Ukraine and its implications. Shapoval initially painted a picture of the disruption to the Ukrainian society caused by the Russian aggression, explaining how KSE stepped up during the first months of the war, in some areas doing the work of ministries. While the government has mainly taken back some duties, the KSE is still providing policy advice in areas related to the effects of sanctions, estimates of damages, and food security among others. KSE is also highly active within the areas of education and health, working with Ukrainian schools through the KSE Charitable Foundation (KSE CF) to ensure students can safely return to the classrooms.
Another important aspect of the work carried out by KSE concerns spreading knowledge about and shedding light on the situation in Ukraine. Through the various networks, by talking to colleagues within academia but also to the media, KSE is trying to explain what has happened and is still happening in Ukraine. According to Shapoval, there is a need for delivering correct information and to keep attention fixed on the situation in Ukraine such that people are kept aware of what is going on in the region.
Shapoval also regularly returned to the role of education and research for the present and future Ukraine. According to Shapoval, avoiding brain drain and ensuring Ukrainians are equipped with the necessary knowledge is key to rebuilding a future Ukraine founded on well-functioning democratic institutions. To facilitate this, the KSE is offering two programs, Memory and Conflict Studies (a multidisciplinary field concerned with how the past can be understood and remembered, and how it might impact the present transformation of societies) and Urban Studies, both aimed at covering the future need for competence within these fields. Further mentioned by Shapoval is the fact that, due to the war, many Ukrainians have left the country and are being educated elsewhere. While this partially ensures intellectual human capital is not lost, these students must be kept anchored to Ukraine through networks to ensure they will return back to help rebuild Ukraine. This is especially important in order to counter the ongoing evolution in Russia.
Thoughts on the Role of Russia in the Region
While the recent developments in Ukraine have of course disrupted education and research in more severe and tangible ways, the situation for independent researchers in Russia has also deteriorated. Torbjörn Becker, Director of SITE, emphasized how several Russian colleagues in exile still collaborate with the FREE Network on policy work and research. Becker also further stressed how they will be paramount once Ukraine wins the war, as will the role of partnerships for a future transformation of the Russian society. Acknowledging that there are many Russians (especially amongst academics in exile) who oppose the war, Shapoval however stressed the disturbing fact that many Russians do seem to support the Russian aggression and that the role of Russia as a destructive force in the region cannot be understated. This was seconded by Tamara Sulukhia, Director of the International School of Economics at Tbilisi State University (ISET). Sulukhia argued that Russian politics slow down and disturbs the free states within the region, and hampers organizations and countries from moving in the right direction in regard to democracy, economic evolution and integration toward Europe. Both Shapoval and Sulukhia reminded the audience that even with a Ukrainian victory, and this in a war which is defining the future of democracy in the region, Russia will persist. Russia has proven time and again, by effectively occupying 23 percent of Georgia as of 2008, with the occupation of Crimea in 2014 and with the most recent war on Ukraine, to be a real military threat to post-Soviet countries. Even though Russia losing the war would shift the power dynamics in the region, the ever-present threat of Russia is not only of a military character. Russia also attempts to impact education, research and knowledge more generally by promoting a Soviet-style education and by altering reality through propaganda and false information.
While discussing the current situation of higher education within economics in Belarus, Dzmitry Kruk, Deputy Academic Director of the Belarusian Economic Research and Outreach Center (BEROC), regularly came back to the negative impacts from Russia on the quality of education and research. Where the western style education is free but also differential, Soviet-style education is centred around learning how to fulfil instructions, according to Kruk. The Belarusian educational system is anchored to Russia and as a result Belarusians today have what Kruk referred to as a “spoilt mental map”. The necessity of free education and research outside the Russian alternative (which is mainly published in Russian and with a post-Marxist view of the world) is vital in order to equip people with the tools to respond to the new types of dictatorship evident in the region. Young people within academia who have experienced freedom and have had the opportunity of thinking for themselves will also be vital on the future path toward democracy. Kruk’s opinions were furthered by Shapoval stating how education must and should counter the risk of brainwashing in the region and in the world as a whole. Shapoval argued the necessity of countering propaganda with the help not only of education but also the legislation of media and social media and enforcement of international laws in general. The necessity of ensuring new values for intellectuals and students in times to come is of paramount value and, according to Shapoval, as important to halting the Russian imperialist visions today as it was some thirty years ago. Shapoval further argued that the threat from Russia’s ambitions should be met not only with education and research but also through installing a sense of hope and prosperity among young people.
Investments into Education and Research as a Safeguard and Development Driver
While countries within the turbulent region differ, not least in regard to overall political ambitions and structure, in most of them investments into education and research have been paying off. KSE’s expertise allowed it to work closely with the Ukrainian government, standing strong in their fight against Russia. The impact from investments into education and research in the region is also evident in both Georgia and Latvia.
Sulukhia argued ISET to be, and to have been, a key contributor to human capital among Georgians as well as others in the Caucasus region. Sulukhia argued this to be especially important when under occupation, mentioning how Georgia has, since the occupation of the two regions of Abkhazia and South Ossetia, in all ways possible tried to ensure that the human capital of internally displaced people is not lost. ISET have ten folded its intake of students and is today providing world-class education in the Georgian language, effectively counteracting brain drain. Post-graduates are working in major institutions providing relevant knowledge and competence in key areas of not only the Georgian society but also other countries in the Caucasus. A similar picture was painted by Anders Paalzow, Rector at Stockholm School of Economics in Riga (SSE Riga). Paalzow specifically pointed out how the investments in education made in Latvia in the 1990s have truly paid off, with graduates having been absorbed into relevant parts of the Latvian society and the Baltics for decades.
Having previous students in key positions in society to ensure sound policy work (such as good fiscal and audit control of the countries in question etc.) is however not the only benefit of investing in education and research within the region. As emphasized by Sulukhia, institutes within the FREE Network and other networks alike are strategically vital in the sense that they ensure knowledge and evidence for policy makers and as they convey evidence-based messages for the general public. This is especially important in a time when the message of the developmental direction for the countries within the region has to be reinforced in order to stand against Russian misinformation and propaganda as well as voices questioning the benefits of European integration. Sulukhia emphasized how it is of importance that the relevance of education and research is rooted among the people and not only within academia to evade the risk of preaching to the choir. Vlad Mykhnenko, Fellow at St. Peter’s College at the University of Oxford, further argued it is necessary for academia to be much more policy oriented than what is the reality today. Researchers should comment on political events and public policy to ensure the outreach of knowledge and information, not just to help the public have a greater understanding of complex issues but also to help inform experts. According to Myhnenko, other researchers are keen on getting context-relevant knowledge and insights from economists working within the region.
The necessity of communicating the outcomes from investments within economics education and research and more broadly within social sciences was a recurring theme during the conference. Presenting the University’s engagement in various programs such as Erasmus+, Horizon Europe, The European Strategy for Universities etc., Professor Agnieszka Chłoń-Domińczak from the Warsaw School of Economics (WSE) outlined the importance of funding from the EU. Chłoń-Domińczak highlighted how EU support has enabled greater partnerships and internationalization and pointed out that while the transfer of knowledge and internationalization of students and researchers are of the essence, there is a need for also ensuring capacity building among other staff when building sound institutions. Internationalization through the exchange as a hedge against brain drain and as a means of improving the quality of academia was further emphasized by Michal Myck, Director of CenEA.
Chłoń-Domińczak, alongside Paalzow and the Swedish Ambassador to Poland, Stefan Gullgren, further argued the necessity to bridge between business and academia. This, especially as investments in social sciences, as compared to investments in natural sciences or technology cannot be commercialized. Additionally, the former havs payoffs in the long run which lowers investment incentives for firms making it even more crucial to communicate the large benefits to society of investments into the sphere. Ensuring consistent and continued support requires not only a good connection to businesses but also proper legal structures in place. As argued by Gullgren, the Swedish model with private businesses funding about 70 percent of research and education in Sweden, is made possible largely thanks to the fact that many investments are funnelled through foundations that are exempt from taxation when set up to finance research grants and education. Thus, one should consider not only business, academia and investors when thinking about future funding for research and education, but the legislative framework as well, especially in contexts such as the future rebuild of Ukraine.
As for how the benefits from investments into social sciences best are communicated, opinions shifted among participants throughout the day. On the one hand, Becker’s argument of being visible not only in traditional media but on social media alike was met by Shapoval, highlighting the need for a regulatory framework for both platforms. On the other hand, Myhnenko’s argument for more policy oriented and outreaching research was met by Kruk claiming there is a risk of researchers within economics deviating too far from research within the field. Kruk also addressed the argument of being available on social media by countering that in his view, researchers should refrain from work based on what generates clicks or reads.
The Relevance of the FREE Network in times of War
Considering the evidence brought forth during the conference by colleagues within the FREE Network, be it the suppression of BEROC in their efforts of founding a School of Economics in Belarus, the effects on the KSE from the war on Ukraine, or the rise of anti-European expressions in Georgia, the necessity of the network was at the end of the day perhaps clearer than ever. As highlighted by virtually all speakers during the conference, internationalization through networks such as the FREE Network fosters open minds, allows for improvements within all aspects of academia, and enables the exchange of thoughts, ideas and experiences. Although the heterogeneity of the region should not be overlooked and investments made in accordance with this, the similarities between the countries within the FREE Network outnumber the differences. The immediate threat from Russia must be met with knowledge and fact-based information as well as high-quality education and research being made available among the population in the region as a whole. To ensure a continued transition within the region, the risk of brain drain must be evaded through continuous support to the social sciences, as these have the power to truly transform nations.
Concluding Remarks
The FREE Network public conference in Warsaw was the first in-person conference since the outbreak of the Covid-19 pandemic. The benefits of meeting in person were however overshadowed by the ongoing Russian aggression on Ukraine and ultimately on democratic ideals, including those of independent academia. We hope to welcome all FREE Network institutes to next year’s conference in Kyiv, to further discuss how outstanding education and research can help rebuild a sovereign Ukraine.
List of Participants
- Torbjörn Becker, Director of SITE
- Agnieszka Chłoń-Domińczak, Professor at WSE
- Stefan Gullgren, Swedish Ambassador to Poland
- Dzmitry Kruk, Deputy Academic Director, BEROC
- Michal Myck, Director of CenEA
- Vlad Mykhnenko, Fellow, St. Peter’s College, University of Oxford
- Anders Paalzow, Rector SSE Riga
- Nataliia Shapoval, Vice President for Policy Research at KSE
- Tamara Sulukhia, Director of ISET
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Higher Education and Research in War and Peace
On Saturday, September 10, the FREE Network together with the Centre for Economic Analysis (CenEA) and the Stockholm Institute of Transition Economics (SITE) will host a conference to discuss the importance of higher education and research in war and peace and how EU countries can support the transformation of societies on the road to EU accession.
The value of knowledge and how it is spread and used in any society cannot be overestimated. This is obvious to most in peace times when there is ample focus on modernization, innovation, and transformation of societies in a sustainable manner, where research and education are key inputs to these processes. But also in times of war and conflicts, education and research are important factors in the immediate war efforts as well as providing the foundation for a successful post-war transformation. In Ukraine today, despite Russia’s senseless war and atrocities in the country, the Kyiv School of Economics (KSE) and other educational and research institutions are making important contributions to its governments efforts to defend the country and provide hope for the future.
Conference
This event will provide an introduction to how the Forum for Research on Eastern Europe and Emerging Economies (FREE Network) unite institutions in EU countries and Eastern Partnership countries to provide higher education, research, and policy analysis to the benefit of current and future generations of Europeans. It will also provide up-to-date accounts of how the Kyiv School of Economics and the academic community are fighting for Ukraine and the future of Europe.
Program
11.30-12.00 – Registration and coffee
12.00-13.30: Session I
- Welcome, Michal Myck, Director of CenEA
- FREE Network: Supporting Economics Education and Research in Central and Eastern Europe, Torbjörn Becker, Director of SITE
- Education and Research for Regional Development: International School of Economics in Tbilisi, Tamara Sulukhia, Director of ISET
- Times of Peace and Times of War: Development of the Kyiv School of Economics and its Response to the Russian Invasion, Nataliia Shapoval, Vice President for Policy Research at KSE
13.30-14.30 – Lunch
14.30-15.30: Session II
- EU Support for Education and Research – the case of the Warsaw School of Economics Agnieszka Chłoń-Domińczak, Professor at WSE
- Education and Research Support from the Individual Member States: the Swedish Case Stefan Gullgren, Swedish Ambassador to Poland
- Higher Education in the Baltics, Anders Paalzow, Rector SSE Riga
15.30-16.00 – Coffee break
16.00-17.30: Panel Discussion—The role of Economics Education and Research in transforming societies
- Dzmitry Kruk, Deputy Academic Director, BEROC
- Nataliia Shapoval, Vice President for Policy Research at KSE
- Vlad Mykhnenko, Fellow, St. Peter’s College, University of Oxford
- Moderated by Tamara Sulukhia, Director of ISET
17.30 – Summary & closing
17.30-18.30 – Reception
Registration
The conference will take place at the Royal Castle (Concert Hall), Warsaw, Poland, and will be streamed online. For online access please register via the Trippus platform (here).
Disclaimer: Opinions expressed during events and conferences are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Economic and Social Context of Domestic Violence: Research Shared at the 2022 FROGEE Conference
This brief summarizes the research papers presented at the 2022 FROGEE conference “Economic and Social Context of Domestic Violence”, which took place on May 11, 2022. It was organized by the Stockholm Institute of Transition Economics (SITE) together with the Centre for Economic Analysis (CenEA) and the FREE Network. Two additional briefs related to the conference are published on the FREE policy briefs website – a brief on gender-based violence in conflict based on the panel discussion, and another sharing preliminary results from the recent FROGEE survey.
While the concerns about domestic violence (DV) and intimate partner violence (IPV) have been gaining prominence since the start of the COVID-19 pandemic, they were further exacerbated by the devastating events happening in Ukraine. Times of crisis or conflict makes the issue more severe, however, gender-based violence is sadly prevalent at normal times too, and a major portion of it is DV and IPV. Limiting violence towards women requires understanding the determinants of DV and IPV and the channels through which they take effect. With this in mind, the Stockholm Institute of Transition Economics (SITE) together with the Centre for Economic Analysis (CenEA) and the FREE Network invited researchers to present their work relating to the economic and social context of domestic violence. This brief provides an account of what was shared at the conference.
Prevention of Domestic Violence: What Works and What Doesn’t?
Three presented studies geared toward evaluating policies aimed to limit violence against women.
Dick Durevall shared his findings on IPV and national policy programs in Colombia, focusing on the laws and policies implemented based on the UN campaign “UNiTE to End Violence Against Women” between 2010 and 2015. To evaluate the effect of these policies, he adopts a differences-in-differences design and compares provinces that had a gender policy before this renewed effort with those that did not. This builds on the idea that provinces that had an IPV policy strategy before UN recommendations were adopted are more efficient in implementing new such policies. It is found that self-reported physical violence falls from 20% to 16% between 2010 and 2015 in provinces that had IPV policies while this number remained at 18% in those that did not. While sexual violence decreased in both groups, provinces with IPV policies experienced a stronger reduction.
Accurate reporting is a key issue when it comes to IPV since it makes up the foundation for designing effective policy. Due to long-lasting and tiresome judicial procedures, threats, social barriers, or emotional costs, victims might choose not to report. Looking at the introduction of specialized IPV courts in Spain, Marta Martínez-Matute presented her paper on how institutions shape reporting. Bestowed with specialized staff, victim-oriented resources, and a swifter judicial process, these courts are specifically designed to deal with IPV cases. Martínez-Matute and co-author investigate if these resources make women more prone to report IPV by exploiting the sequential rollout of specialized courts. They use yearly court-level data on individual IPV cases between 2005 and 2018 in a staggered difference-in-differences framework with matched control districts. The results show that the introduction of an IPV court in a judicial district reduces the length of the judiciary process by 61% and increases the reported number of IPV cases by 22%. Ensuring that this increase is not fully driven by a rise in false reports, it is found that the share of dismissed IPV cases remains unchanged. Further, it is shown that the increase is driven by less severe IPV cases and not aggravated IPV offenses or homicides.
A distinctive feature of DV crimes is that there is a high degree of recidivism, with many women experiencing repeated violence from the same partner. However, little is known about how police should respond to such crimes to ensure safety to those victimized. From one perspective police arrests deter repeated DV crimes since they incapacitate perpetrators and allow police to investigate while offering safety to victims. However, some argue that this safety is merely temporary and that DV arrests might trigger offenders to retaliate against victims, leading to increased long-term DV. Against this reasoning, Victoria Endl-Geyer presented a study on the relationship between police arrests and DV dynamics in the UK. It uses highly granular administrative data on the population of DV incidents in the West Midlands which allows the researchers to observe the detailed information on the incidents’ timing and location as well as on police officers and their crime scene responses. It adopts an instrumental variables approach using the dispatch team’s previous propensity to arrest (measured as the weighted average arrest rate of officers in the team) as an instrument. The results provide evidence consistent with a deterrence effect. While regular OLS estimates show an insignificant impact, the IV results indicate that an on-scene arrest decreases repeat DV incidents by 25-26 percentage points. They find that the effect is the same when restricting the sample to incidents reported by a third party, supporting that this effect is not driven by a change in reporting behavior.
Factors of Domestic Violence and its Mechanisms
Other studies presented at the conference focused less on policy assessment and more on identifying the determinants of IPV and DV.
Losing or obtaining a job causes a shock in the intra-relationship dynamics and changes the economic power balance between spouses. Deniz Sanin presented her paper on the DV effect of women’s employment in the context of Rwanda. Following the government-initiated National Coffee Strategy in 2002, the number of coffee mills in Rwanda increased from 5 to 213 over the course of ten years. This natural experiment allows studying the effect of having a paid job as it captures the shift from unpaid labor on a family farm to paid work on a mill, keeping job-related skills constant. Using survey data on both DV and labor market outcomes along with administrative data on DV hospitalizations, the study adopts a staggered difference-in-differences strategy and compares women before and after mill opening as well as within and outside of the catchment area (a buffer zone surrounding the mill). The results show that upon mill opening, the probability of working for cash increases and that of self-reporting domestic violence in the past 12 months decreases by 26% (relative to the baseline of 0.35). During the harvest months, the only period of the year in which the mills operate, hospitals are significantly less likely to admit DV patients compared to the month before the harvest season, suggesting that the initial results are not driven by reporting bias. Looking at the mechanisms, she finds evidence supporting an increased bargaining power explanation – women in catchment areas who are exposed to mill opening are more likely to have a bigger say in household decisions such as larger household purchases and contraception usage. Increases in husbands’ earnings and decreased exposure are also ruled out as possible channels since a decline in DV is also found among spouses where the husband works in a different occupation with no change in earnings.
Rather than studying the impact of women’s employment status, Cristina Clerici shared a related paper that focuses on male unemployment. To investigate its effect on IPV, the study exploits the exogenous shock to employment caused by COVID-19 containment measures in Uganda. The authors collect individual-level data via phone surveys on the incidence of IPV among food vendors, including information on husbands’ sector of employment. To identify a causal DV effect of male employment exit, the authors distinguish between two groups of women with similar pre-lockdown experiences of abuse: those with spouses employed in sectors where operations were halted by COVID-19 lockdowns (construction workers, taxi drivers, etc.) and those with spouses who were unaffected (food vendors, farmers, etc.). The results show that male unemployment increases the probability of experiencing physical violence by 4.9 percentage points, corresponding to a 45% increase relative to the average likelihood. The effect cannot be explained by increased exposure (the man being more at home) – affected and unaffected women spend on average an equal number of nights in the market, which could be used as a coping mechanism. This suggests it is the change in unemployment status itself that drives the increase in DV.
While most of the literature on domestic abuse has documented that its drivers often come from changing life conditions of the victim or perpetrator, there is broad anecdotal evidence that exogenous events can lead to exacerbations in domestic violence as well. Ria Ivandic presented her paper that documents a causal link between major football games and domestic violence in England. The authors use a dataset on the universe of calls and crimes in the Greater Manchester area. The data provides a time series on the incidence of different types of domestic abuse with information on the timing, relationship to the accused, and individual characteristics of the victim and perpetrator, including whether the perpetrator was under the influence of alcohol at the time of the incident. They adopt an event study approach focusing on the hours surrounding a game and document a substitution effect in that the two-hour duration of a football game is associated with a 5% decline in DV incidents. However, following the game, the initial decrease is offset as DV incidents start increasing and culminate after 10-12 hours, eventually leading to an aggregate positive effect which constitutes a 2.8% hourly increase on days when games are played.
The authors argue that alcohol consumption, rather than emotions, is the main mechanism through which domestic violence is affected by sporting events. Supporting this hypothesis, they first find that the outcome of the game or the associated element of surprise (measured using the ex-ante probability of winning a game through betting markets) does not affect the probability of DV occurring. Second, they show that the increase in DV following a game is solely driven by an increase in alcohol-related DV incidents, while those committed by non-alcoholized men remain constant. Further strengthening this finding, it is shown that for games scheduled early in the day, when perpetrators can start drinking sooner and continue throughout the day, they find a significant increase in DV incidents committed by alcoholized perpetrators while this is not the case for late-scheduled games.
The Role of Women’s Empowerment
In the literature on gender-based violence, there is a common disposition to think about women’s empowerment as a central element of DV mitigation. However, theories point in opposite directions making the effect of women’s economic empowerment rather unclear. On one end of the spectrum, there are bargaining theories indicating that an increase in women’s employment opportunities or income should have a negative effect on DV by creating outside options or increasing the bargaining power in a relationship. At the other end, there are backslash theories arguing that enhancing women’s financial empowerment may further exacerbate violence by undermining the role of the breadwinner, triggering male partners to retaliate with the use of violence in order to restore the power balance. Going in the same direction, theories of instrumental violence point towards that the male partner might also use violence to extract resources.
In her keynote lecture, Bilge Erten outlined the evidence relating to DV and women’s empowerment and discussed to what extent and in which contexts these theories are supported.
The evidence of a positive or negative effect of empowerment may depend on which aspect of it is studied. Education is seen as an important one because it has the potential to raise women’s self-awareness of IPV, increase the likelihood of matching with a well-educated partner (which is negatively correlated to abusive behavior), and improve labor market outcomes. Although evidence is scarce in this area, Erten shared her own findings on the causal effect of education reform on IPV in Turkey. In line with instrumental violence theories, it is found that, while women in cohorts affected by the reform performed better in the labor market, they experienced more psychological violence and financial control behavior, and there was no sign of an effect on DV attitudes, partner-match quality or marriage decisions.
What we know about women’s empowerment and DV is also different across countries. When it comes to the effect of employment, findings from developed countries are generally consistent with bargaining theory explanations while what is found in the developing world is more mixed. This is also the case for studies on unilateral divorce laws – while a negative effect on IPV has been documented in the United States, a positive effect of these laws is found in Mexico.
Assessing the literature on the income effect leads to a somewhat ambiguous verdict too. Although generally, most studies confirm that overall violence declines with women’s income, there is often heterogeneity in the effect. It has for instance been found that the sign of the income effect from cash transfers on DV changes from negative to positive as the size of the transfer increases.
Finally, Erten provided some important policy considerations. There is evidently a widespread backlash problem that can arise after a policy intervention of the types discussed above. Policymakers need to think more about monitoring and protecting victims from more violence when implementing such a policy. Further research assessing post-intervention is also needed to identify interventions that are the most effective in minimizing domestic violence. In particular, a change in broad social norms around gender roles should be a desirable outcome, to the effect that a new, improved status of women in society and in the household becomes more culturally acceptable and needs not lead to backlash. In the case of expressive violence (that is not a rational, calculated response but rather a compulsion in the heat of the moment), mental health interventions should also be considered.
Concluding Remarks
As highlighted by the 2022 FROGEE conference, domestic violence not only has been put in the spotlight following the pandemic or the ongoing conflict in Ukraine, but is widespread across the globe in regular conditions too. The mixed findings shared at the conference suggested that policies limiting gender-based violence should be designed with respect to the cultural and social setting where they are to be implemented as the heterogeneity is very high across contexts. Although research has come a long way, the conference stressed that there is much more to be done, in terms of not only knowledge but also the political will and commitment to seriously address the issue of gender-based violence.
The presentations held at the conference can be viewed at this link and a separate policy brief based on the panel discussion on gender-based violence in times of conflict can be found here.
List of Speakers
- Cristina Clerici, Ph.D. Student in Economics at the Stockholm School of Economics.
- Dick Durevall, Professor at the Department of Economics, University of Gothenburg.
- Victoria Endl-Geyer, Doctoral Student at the IFO Institute.
- Bilge Erten, Associate Professor of Economics and International Affairs at the Institute for Health Equity and Social Justice Research at Northeastern University.
- Ria Ivandic, Associate Researcher at the London School of Economics.
- Marta Martínez-Matute, Assistant Professor at the Department of Economic Analysis at Universidad Autónoma de Madrid.
- Deniz Sanin, Ph.D. Candidate at Georgetown University.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
Gender-Based Violence in Conflict
The eruption of war exposes women to increased gender-based violence, in the immediate conflict area as well as in the countries where they seek refuge. Acknowledging the specific conflict-related risks that women face is important, in order to target interventions, especially considering that the actors that sit at peace negotiation tables are predominantly or exclusively men. In this policy brief, we discuss the implications of conflict for gender-based violence, with a special focus on the ongoing war in Ukraine. We also outline some policy interventions that might help mitigate the risks that women face, holding those responsible to account, and building a more gender-equal society from the reconstruction efforts. Our discussion draws from existing academic literature and inputs from the special panel session on conflict during the FROGEE conference “Economic and Social Context of Domestic Violence”.
Gender-Based Violence During Conflicts
During war, as in peacetime, women are exposed to different forms of violence, and to a different extent, as compared to men. In other words, there are gender-specific aspects of conflict-related violence, both in immediate conflict areas and in the places where affected populations might seek refuge.
One form of violence against women in conflict areas is sexual violence and rapes perpetrated by combatants. Scholars and policy analysts tend to portray this violence as a weapon of war (Eriksson and Stern, 2013), meaning that it is a way of humiliating and demoralizing the enemy as individuals and as communities. Differently put, the narrative that portrays sexual violence as, for instance, the consequence of unmet sexual needs among soldiers is increasingly less accepted. Sexual violence against women perpetrated by armed forces in conflict areas is tragically prevalent. While proper quantification of the phenomenon is hard for obvious reasons, it is estimated for example that at least 500,000 women were raped during the Rwandan genocide, and 50,000 during the war in Bosnia (Guarnieri and Tur-Prats, 2022).
Another form of gender-based violence in conflict is that women who are uprooted by war tend to confront a high risk of sexual violence during their journey away from home and in the places where they seek refuge. Vu et al. (2014) estimate, through meta-analysis, that approximately one in five refugees or displaced women in complex humanitarian settings experienced sexual violence. The study also highlights the need for more data to shed light on the characteristics of perpetrators. The presence of aid workers among them appears to persist through several humanitarian crises (Reis, 2021).
Further, women and children fleeing war areas are vulnerable to the risk of trafficking and exploitation for sexual or other work (as highlighted in the FROGEE conference panel). Traffickers and criminal organizations tend to exploit the combination of a mass movement of people in precarious economic situations and the decreased scrutiny generated by the humanitarian emergency.
Finally, war heightens the risk of intimate partner violence (IPV) in conflict areas as well as among refugees and displaced individuals, by causing stress, trauma, economic hardship and increased substance abuse, all of which lead to deterioration in mental health and the quality of relationships (Conference panel). An actual or perceived sense of impunity can also undermine victims’ propensity to report IPV at such a time. A systematic review of the published literature on gender-based violence in conflict finds that estimated rates of IPV across most studies are much higher than the rates of rape and sexual violence perpetrated outside the home (Stark and Ager, 2011).
The consequences of conflict on IPV can be long-lasting. Evidence from post-genocide Rwanda shows that women who married after the conflict were more likely to be victims of spousal abuse; skewed sex ratios that reduced women’s bargaining power in the marriage market appear to be the relevant channel (La Mattina 2017). Another important factor is posttraumatic stress disorder (PTSD) among veterans: a study of US military personnel shows that assignment to combat in the Global War on Terrorism is associated with higher incidence of domestic violence and lower relationship quality (Cesur and Sabia, 2016). The increased availability of small weapons can also lead to more frequent or more violent instances of domestic abuse (Conference panel).
The War in Ukraine
Reports from the US State Department and Amnesty international document episodes of sexual violence from armed conflict actors in Donetsk and Luhansk since the start of the conflict in 2014 (Amnesty International, 2020). Both Russian and Ukrainian military were involved, speaking to the tragedy that the population close to the “contact area” have witnessed since 2014.
At present, growing evidence is emerging that Ukrainians, especially but not exclusively women and girls, are victims of rape, gang-rape and forced nudity perpetrated by Russian military troops invading the country (United Nations). It is notoriously difficult to collect and verify data and facts on sexual violence during wartime, but these early accounts, and the experience from previous conflicts, call for a high level of scrutiny and readiness to help. Research also suggests some potential factors that aggravate the prevalence of sexual violence in conflict. Guarnieri and Tur-Prats (2020) show that armed actors who hold more gender-unequal norms are more likely to be perpetrators of sexual violence, and that the incidence of sexual violence is highest when the parts in conflict hold gender norms that differ substantially (Guarnieri and Tur-Prats, 2022). Survey data show that the share of people who appear to hold gender-unequal norms in Russia remained high over the years, based on questions on the effectiveness of women and men as political or business leaders (Figures 1 and 2), or the desirability of women earning more than their husbands (not shown).
Figure 1. Men make better political leaders than women do, % agreement
Source: World Value Survey
Figure 2. Men make better business executives than women do, % agreement
Source: World Value Survey
Evidence on the evolution of norms in Ukraine is more mixed (see Figures 1 and 2). All in all, surveys of gender-role attitudes suggest that gender stereotypes persist in Russian society, but it is not obvious that the prevailing gender norms are starkly different between Russia and Ukraine. On the other hand, attitudes toward IPV in the two countries might be evolving differently, at least among the respective elites, based on the fact that legislation on domestic violence recently changed in opposite direction in the two countries. Specifically, Russia decriminalized minor forms of domestic violence in early 2017. Conversely, Ukraine strengthened the legal response to domestic violence in early 2019, in particular making minor but systematic domestic violence criminally punishable, and extending criminal punishment beyond physical violence to include emotional and economic violence.
As a consequence of the war, almost 13 million Ukrainians have left their homes since Russia invaded on Feb. 24, 2022, according to the United Nations. Almost all of them are women and children, since men and boys aged 18 to 60 are required to stay in Ukraine to defend the country. Women traveling alone with their children, especially when fleeing to foreign countries where they often have no connections, are clearly at risk of assault and exploitation. Such risk is heightened by the exceptional speed of the refugee influx, whereby an impromptu response from the host countries is by necessity reliant on individual independent participation. Private hosts have spontaneously been opening their homes to accommodate for days or even weeks Ukrainians fleeing the war. Proper vetting of these offers is made difficult by the sheer number of people who are being welcomed in bordering countries, for instance Poland, as well as by the exceptional response from private individuals. Within a little more than a month from the start of this crisis there had already been a few episodes of sexual violence against Ukrainian refugees in their host countries (specifically in Poland and Germany).
While the current death toll in the war in Ukraine is unlikely to lead to dramatically skewed sex-ratios, this aspect might become more relevant as events evolve, in light also of the fact that nearly the universe of those who fled the country so far consists of women and children.
Finally, in the post-conflict period, the presence of small weapons, which have been made available to civilians to defend the country, is an additional risk factor for IPV (Conference panel).
What Can Be Done?
Academics, international organizations, activists and female politicians from Ukraine have made specific requests to improve the system of protection and accountability in the face of sexual violence against women living in or fleeing from conflict zones. These suggestions include ensuring that the system of transitional justice that will govern the post-conflict period establishes proper investigation and punishment of every form of sexual violence performed by armed actors during the war. To this end, some steps have already been taken. The UN Resolution in favor of the creation of an International Commission of Inquiry refers explicitly to the need to recognize the gender dimension of violations and abuses.
Beyond the horizon of the war, the safety of Ukrainian women in their homes relies on the protection offered by State legislation against domestic violence. In this respect, the Ukrainian government has recently taken a few measures in what the international community deems to be the “right direction”. A very important reform taken in the summer of 2021 allows for the military to be prosecuted for domestic violence on a general basis rather than on the basis of the disciplinary statute as it was before. This is especially important in light of the findings of increased risk of domestic violence in families of veterans (Cesur and Sabia, 2016). However, some critical aspects remain. In the current context, a crucial factor might be the limit of 6 months to prosecute the crime from the occurrence of the violence. An extension of such a period at a time when the normal functioning of many institutions is suspended or subject to delays can attenuate the perception of impunity that the exceptionality of the circumstances creates.
When it comes to refugees, there is as mentioned a need for better vetting of private hosts, although the urgency of action that the current circumstances require makes this a particularly challenging task. State effort in this direction has been complemented by civil society initiatives. For example, in Sweden, Facebook groups that lined up to coordinate the offer of housing are now organizing themselves to create a system for verifying housing and hosts.
Ukrainian politicians have also asked Western countries to be prepared to offer expertise on how to support survivors of rape and other sexual violence in conflict.
Other experts recommend reliance on cultural and linguistic mediators to help refugee women access services for victims of IPV that are already offered by local actors in their temporary host country (Conference panel).
In the longer term, guaranteeing economic safety for refugees is also an effective measure to reduce their vulnerability to exploitation from sex-traffickers and criminal organizations.
Finally, yet importantly, the involvement of women in peace negotiation processes should be sought after. Echoing the discussion on women’s scarcity in leadership positions in peacetime, the gender-unequal composition of peace delegations poses an issue of equality, representativeness, and efficiency (Bertrand 2018). Interestingly, it has been noted that a more truthful narrative of war, which recognizes women’s role not only as victims but also as perpetrators (and the converse for men, although proportions are clearly unbalanced in both cases), might help pave the way for higher female representation at negotiation tables (Conference panel). Relatedly, the European Institute for Gender Equality proposes gender mainstreaming of all policies and programs involved in conflict resolution processes (EIGE). The international community should also consider gender mainstreaming of reconstruction programs, to help build a more gender-equal post-conflict Ukraine.
References
- Amnesty International. (2020). Not a Private Matter. Domestic and Sexual Violence against Women in Eastern Ukraine.
- Baaz, M. E., and Stern, M. (2013). Sexual violence as a weapon of war?: Perceptions, prescriptions, problems in the Congo and beyond. Bloomsbury Publishing.
- Bertrand, M. (2018). Coase lecture–the glass ceiling. Economica, 85(338), 205-231.
- Cesur, R., and Sabia, J. J. (2016). When war comes home: The effect of combat service on domestic violence. Review of Economics and Statistics, 98(2), 209-225.
- Guarnieri, E., and Tur-Prats, A. (2022). Cultural distance and conflict-related sexual violence. Mimeo
- Reis, C. (2021). Sexual abuse during humanitarian operations still happens. What must be done to end it. The Conversation, October 5 2021. https://theconversation.com/sexual-abuse-during-humanitarian-operations-still-happens-what-must-be-done-to-end-it-169223
- Stark, L. and Ager, A. (2011). A systematic review of prevalence studies of gender-based violence in complex emergencies. Trauma, Violence, & Abuse, 12(3), pp.127-134.
- Vu, A., Adam, A., Wirtz, A., Pham, K., Rubenstein, L., Glass, N., Beyrer, C. and Singh, S. (2014). The prevalence of sexual violence among female refugees in complex humanitarian emergencies: a systematic review and meta-analysis. PLoS currents, 6.
Disclaimer: Opinions expressed in policy briefs and other publications are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.
(Ce)2 Workshop
The (Ce)² workshop is a joint initiative of the Centre for Economic Analysis (CenEA, Poland) and the Centre for Microdata Methods and Practice (CeMMAP, UK). The seventh edition of the workshop will take place in Warsaw on 27-28 June 2022.
The 2022 keynote lectures in the Lecture Series in Honour of Leonid Hurwicz will be given by:
- Professor Anna Aizer (Brown University)
- Professor Daniel Hamermesh (the University of Texas at Austin and IZA Bonn).
In light of the Russian invasion of Ukraine and its consequences, we issue a modified Call for Papers. The workshop will feature sessions on forced migration which will be organised in cooperation with migration experts from the University of Warsaw. We extend the list of fields from which we welcome studies to the following:
- Human capital development
- Intergenerational mobility
- Poverty alleviation
- Discrimination and inequality
- Domestic violence
- Forced migration
- Internal displacement
Program
The preliminary programme can be found here. There is no conference fee but participants are expected to cover their own travel and accommodation costs.
Only full papers will be considered (early versions are welcome). Authors will have 50 minutes for their presentation and they will be expected to discuss another paper presented at the workshop. The total number of presentations will not exceed 20.
The call for the poster session is now open for submissions.
The call for papers issued for the workshop can be found here.
WIEM 2022
Participants of the (Ce)2 Workshop are also encouraged to take part in the XVII Warsaw International Economic Meeting (WIEM) on 28-30 June 2022, as presenters or audience members. The Hurwicz keynote lectures, held on the afternoon of June 28, will also serve as the opening event for WIEM.
The 2022 (Ce)² Workshop is organised as an initiative of the FREE Network and is supported by the Swedish International Development Cooperation Agency (Sida).
Disclaimer: Opinions expressed during events and conferences are those of the authors; they do not necessarily reflect those of the FREE Network and its research institutes.