Using the 2010 Life in Transition Survey, we show that localities with higher religious diversity have more respondents who have tried to set up a business. Although religious diversity also correlates with a higher start-up probability (following trial), this effect is driven by access to...

Entrepreneurial activity is a key contributor to economic growth, innovation and the development of a market economy in transition countries. Data from the Life in Transition Survey reveal that financial sector development and access to credit are the most important drivers of entrepreneurship....

The literature has identified the quality of political institutions in the transition region as an essential but understudied component of growth, transition and reform. This paper aims to disentangle the determinants of democratic institutions by investigating if high income inequality is...

This paper studies the effect of religious and linguistic diversity in a given locality on individual entrepreneurial behaviour, and finds that cultural diversity and entrepreneurship follow an inverted U-shaped pattern. We make three theoretical contributions. Unlike previous research, we are...

This paper examines the effect of inflation on effort and productivity in a representative agent model. We allow individual effort to be a continuous choice variable, which affects utility negatively and output positively. Our general model shows that the effect of inflation on effort, and hence...

This note uses a simple, Nash-bargaining model between a union and a firm to analyze the effect on wages and profits of a simultaneous change in the union's relative preference for wages over employment, and in its bargaining power. It is shown that, if there is efficient bargaining, a rise in...

Rising unemployment and falling living standards are two of the main problems facing economies in transition. In this paper, we present recent developments in labour markets in former communist countries in Europe, and we highlight the distinctive case of Albania, which has the highest levels of...

This note reports the results of field surveys of individuals and firms in Albania, carried out during 1998. The surveys were designed to analyse the extent of emigration from Albania during the 1990s and its causes and consequences. Our results show that emigrants are motivated mainly by the...