Working papers:
"Catastrophic Health Expenditure during Healthcare Financing Reform: Evidence from Kazakhstan"
Abstract: Unequal access to healthcare and inadequate financing have highlighted the need for healthcare reform to increase efficiency while ensuring equity in healthcare financing worldwide. Our study evaluates the capacity of Kazakhstan's healthcare system reform, transitioning from a tax-financed system to compulsory social health insurance (CSHI), to address equity in healthcare financing. Using quarterly Household Budget Surveys from 2017-Q1 to 2020-Q4 in a staggered difference-in-difference estimation technique, we analyze the impact of the transition on the incidence and intensity of catastrophic health expenditure (CHE) and impoverishment. Our findings show that while the transition from a tax-financed to a CSHI system in the short run lowers both the incidence and intensity of catastrophic health expenditure, it does not alleviate impoverishment. In particular, the reform predominantly benefits wealthier households, with no effect on the relatively poor population. We speculate that the positive outcomes observed from the reform in the short run are largely attributed to the exceptionally high insurance coverage during the transition period. The success of the transition from a tax-based to an insurance-based system is heavily dependent on the rate of insurance coverage of the population, as well as the quality of healthcare services and available finances.
Abstract: The government of Kazakhstan initiated a reform of the healthcare system, transitioning from tax-financed to compulsory social health insurance. We analyze the effect of the healthcare reform on out-of-pocket medical expenditure and health in Kazakhstan. The effect of CSHI on conditional total out-of-pocket medical expenditure for the targeted population is a reduction in health care spending by 2,008KZT. Next, we find that the probability that at least one member of a household has bad health declined by 13.8 percentage points under CSHI. Lastly, there was no statistically significant effect of COVID-19 on average total OOP medical expenditure.
This research was partially financed by Nazarbayev University (Funder Project Reference: 110119FD4538)
"Labor Reallocation and Unemployment during the Business Cycles" by Dinara Alpysbayeva and Aigerim Sarsenbayeva
Abstract: We revisit the question of how industry labor reallocation affects the business cycles of selected 12 European countries. Employing firm-level employment data spanning 1999-2021 and utilizing a linear regression model with instrumental variables, we analyze the impact of sectoral reallocation on unemployment, focusing on the timing of the reallocation process and the role of labor market flexibility. Our findings reveal a negative association between labor reallocation and unemployment, with pronounced effects during economic recessions, reaffirming the crucial role of reallocation in mitigating unemployment. Using Employment Protection Legislation (EPL) as a proxy for labor market rigidity, we show that stricter labor market protections slow the effects of reallocation, highlighting the trade-off between job security and labor market flexibility. Achieving this balance is important to harness the benefits of economic reallocation and to ensure the resilience of labor markets in the face of business cycle fluctuations.
"When a market prefers to be informal: the case of Kazakhstani medicinal plants" by Aigerim Sarsenbayeva
The Working Paper Series is produced by the Project on Informal Markets and Trade with the support of a grant from the Volkswagen Foundation’s funding initiative “Between Europe and the Orient — A Focus on Research and Higher Education in/on Central Asia and the Caucasus.”
"Informal Competition in Kazakhstan"
Abstract: The informal economy constitutes around one-third of the economic activity in Kazakhstan, and competitors' practices from the informal sector are identified as the biggest obstacle in the business environment. This paper evaluates the effect of competition stemming from informal firms on formal enterprises using the European Bank for Reconstruction and Development's Business Environment and Enterprise Performance Survey 2008-2009 and 2012-2013 survey data. This was a time period when Kazakhstan experienced an average annual real GDP growth of 5 percent, despite a slowdown in 2009 due to the global financial crisis, while the government introduced new reforms combating the informal economy. As a result, informal competition decreased by 11 percent. In this research, we conduct fixed and changing structure analysis to understand the underlying factors behind this decline. Our findings suggest that 56.8 percent of the decline in informal competition can be attributed to socioeconomic changes. Focusing on the observed heterogeneity the main contributors behind the decline in the rate of informal competition are due to an educated workforce, access to finance, losses due to theft, tax inspections, and transportation as an obstacle to current operations and the services sector. However, the changes in firm size, and electricity and labor regulations have kept competition from decreasing even further. The estimated loss of tax revenue in 2013 due to informal employment was 796 million USD. The authorities have implemented various structural reforms primarily focusing on the financial sector, small and medium enterprises, skills, the investment climate, regional development, and institutional reforms, which support the decline in an informal competition.