The focus of my dissertation is on the relationship between selected economic factors such as income growth, unemployment, inequality, and natural resource abundance and some characteristics of the human capital stock, namely health, longevity, and reproductive behavior.
The first chapter in the dissertation analyzes the link between economic variables and the mortality rate in post-Soviet Russia. Using a fixed-effects model to analyze panel data, I find that the increased income inequality raised the mortality rate during the period 1999 through 2009, while the higher real income per capita reduced the mortality rate. Considering cause-specific mortality rates allows me to get an insight into the particular channels through which economic variables affect mortality. The effect of income inequality is largest on the mortality rate from external causes such as suicide, homicide, accidents and alcohol poisoning. A one-percentage point increase in the decile dispersion ratio in a region is associated with a 1.40 percent increase in the predicted male death rate and a 0.82 percent female death rate from external causes in this region. An annual increase in real per capita income of 1,000 rubles is associated with a 0.01 percent decrease in total male and total female mortality rates. The rise in real incomes is also associated with a decrease in the mortality from the external causes, the heart disease mortality, the cancer mortality, the digestive disease mortality, and the respiratory disease mortality.
The second chapter in the dissertation focuses on the sudden drop in birth rates, which, in addition to a spike in mortality, is a part of the demographic crisis experienced by post-Soviet Russia. More than two decades later, the reasons are still not entirely understood. There is still an ongoing debate among researchers about the causes of this anomalous peacetime demographic crisis. In this paper, I examine regional data to check for a possible link between regional economic conditions and a drop in birth rates in Russia during and after the transition to market economy. I find that the decrease in birth rates is associated with increased unemployment. This finding is evidence that the income effect is larger than the substitution effect leading to procyclical fertility in Russia similar to other countries. The dampening effect of unemployment on birth rates is larger for young adults indicating that they are more affected by economic shocks. Because the negative effect of unemployment was also found for the older age brackets, I conclude that the long-term unemployment created by the economic restructuring required for transition from central planning to a market economy lowered lifetime fertility. The imperfect credit markets accentuated the fertility decline.
In the third chapter I look for the “natural resource curse” at the regional level in Russia. I identify two interpretations of the natural resource curse. Interpretation 1 posits a direct negative relationship between natural resource abundance and regional growth. Interpretation 2 posits a negative relationship between natural resource abundance and the quality of regional institutions. I use two specifications to test interpretation 1. Specification A regresses regional growth on natural resource abundance plus a few other control variables, and it does not reveal slower growth for regions rich in natural resources during the years 2004 through 2013. Specification B adds institutional quality (IQ) into Specification A, and finds that (a) there is weak evidence that natural resource abundance hurts regional growth, and (b) there is much stronger evidence that strengthening IQ will raise regional growth. Interpretation 2 of the natural resource curse is then tested by regressing IQ on natural resource abundance plus a few control variables. There is quite strong support for the hypothesis that an abundance of natural resources in a region lowers the regional IQ. The overall conclusion is that regional growth in Russia is hurt by natural resource abundance operating through the channel of regional IQ.