Working Paper: CEPR ID: DP14027
Authors: Alicia Adsera; Francesca Dalla Pozza; Sergei Guriev; Lukas Kleinerueschkamp; Elena Nikolova
Abstract: Using newly available data, we re-evaluate the impact of transition from plan to market in former communist countries on objective and subjective well-being. We find clear evidence of the high social cost of early transition reforms: cohorts born around the start of transition are shorter than their older or younger peers. The difference in height suggests that the first years of reforms in post-communist countries were accompanied by major deprivation. We provide suggestive evidence on the importance of three mechanisms which partially explain these results: the decline of GDP per capita, the deterioration of healthcare systems, and food scarcity. On the bright side, we find that cohorts that experienced transition in their infancy are now better educated and more satisfied with their lives than their counterparts. Taken together, our results imply that the transition process has been a traumatic experience, but that its negative impact has largely been overcome.
Keywords: transition from plan to market; structural reforms; height; wellbeing
JEL Codes: P36; I14; I31; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| transition from plan to market (P23) | height (Y60) |
| transition from plan to market (P23) | life satisfaction (I31) |
| decline in GDP per capita (O49) | height (Y60) |
| deterioration of healthcare systems (I14) | height (Y60) |
| food scarcity (Q11) | height (Y60) |
| initial deprivation during transition (O15) | height (Y60) |
| initial deprivation during transition (O15) | life satisfaction (I31) |
| maternal stress and nutrition (J13) | height (Y60) |
| quality of public health services (I14) | height (Y60) |