Public Sector Economics - submission site
type: channel
description: Public Sector Economics is a scientific journal published by the Institute of Public Finance in Zagreb, Croatia. The journal seeks submissions of original theoretical, empirical and policy-oriented papers analysing the role and functioning of the public sector at macroeconomic, sectoral and microeconomic levels, in both advanced and emerging market economies. According to SJR – Scimago Journal & Country Rank indicators for 2021, Public Sector Economics is the top economics and econometrics journal in Croatia. Looking forward to many more excellent new issues, your Public Sector Economics team. For the publisher Vjekoslav Bratić
publisher: Institute of Public Finance, Zagreb
language: en
publication name: Public Sector Economics - submission site
issn: 2459-8860
copyright: If accepted for publication, the authors will be asked to sign a Licence to Publish. Authors retain the copyright on the papers published in PSE but grant the right of publication to the journal. Authors must obtain the right to use copyright material (e.g. maps, drawings, literary quotes, lyrics) from its owner before publishing the paper in PSE. PSE is an Open Access Journal licensed under the Creative Commons Attribution-Non/Commercial 4.0 International License, which permits non-commercial use and redistribution, as long as the licensed work is passed along unchanged and in whole, with credit to PSE as its original publisher. The authors can make the results of their accepted papers available before they are published in PSE on preprint platforms, blogs, and other informal communication channels by providing a link to the PSE website and noting that the manuscript will be published in PSE. For complete information on copyright, please see Ethical guidelines for publication in PSE
items: The effect of physical and intangible capital on labour productivity: role of institutional and development factors
items: United Nations World Public Sector Report 2025: Supreme Audit Institutions and the Sustainable Development Goals
items: Exchange rate issues
items: Inflation in Croatia: a new era of forecasting with machine learning
items: Bridging the gap: socioeconomic inequalities in the use of formal and informal home care
items: Different strokes for different folks: untangling supply and demand shocks using survey-data to assess sectoral inflationary pressures in Croatia
items: Public debt and the dollar
items: Are taxes too high? A machine-learning approach to Laffer curve estimation
items: Our Dollar, Your Problem
items: The influence of education on social mobility in Croatia and Greece: a comparative analysis
items: Currency depreciation and inflationary pressure vis-à-vis monetary intervention: perspectives on growth and policy implications
items: When the guns roar: how the war, reserves and exports shape Ukraine’s cost of external borrowing
items: Optimal fiscal policies in booms and recessions: a case study for Slovenia
items: 35 Years of Public Sector Reform in Central Europe
items: Assessing the impact of labour market spendings on unemployment dynamics across demographics in OECD countries
items: Convergence of European healthcare systems: a cluster analysis
items: The role of pay-for-performance in promoting integrated care
items: Determinants of tax morale among university students in Croatia
items: Explaining wage developments in Croatia: the role of the firm composition effect
items: Overeducated yet underskilled: graduate labour market mismatch in Morocco and Serbia
items: Time gap between termination of paid parental leave and eligibility for early childhood education and care services in Croatia
items: Effects of reputation and monetary policy communication on exchange rate uncertainty: evidence from an emerging market economy
items: Public debt and GDP growth in BRICS: unravelling time-scale complexities through wavelet analysis
items: WISEs and their potential to transform the Croatian skill-formation regime
items: An economic analysis of leisure-proportional benefits in a small open economy
items: Governance quality vs. stimulus size: fiscal policy effectiveness during the COVID-19 pandemic
items: Excellence comes from distance: the case of a Croatian higher education institution
items: Is it worth raising the normal retirement age? A new model to estimate the employment effects
items: Analysing the impact of migration flows on regional per capita GDP in Türkiye: a spatial panel data approach
items: Climate finance, institutions and innovation systems in Sub-Saharan Africa

The effect of physical and intangible capital on labour productivity: role of institutional and development factors
type: item
description: Economists agree that physical and intangible capital can have a positive impact on productivity growth. However, the dependence of intangible capital on adequate institutions may lead to its weak impact on productivity in countries with weak institutions. The aim of this paper is to assess the link between investments in physical and intangible capital on the one hand and productivity on the other. For determining differences in the level of effect of physical and intangible capital on productivity depending on institutional and developmental characteristics of countries, the research is divided into two parts. First, we assessed regression models for Croatia, after which we used panel analysis to evaluate a number of models for highly developed countries with quality institutions. The results suggest a significant positive effect of physical and intangible capital in advanced economies, while in Croatia only physical capital has a significant impact.
subject: Articles
  topic: section
subject: labour productivity
  topic: keywords
subject: intangible capital
  topic: keywords
subject: panel analysis
  topic: keywords
subject: institutions
  topic: keywords
subject: economic development
  topic: keywords
creator: Valentin Lovrić
rights: Copyright (c) 2026 Valentin Lovrić (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-06-08
publication date: 2026-06-08
starting page: 215
ending page: 240
doi: 10.3326/

United Nations World Public Sector Report 2025: Supreme Audit Institutions and the Sustainable Development Goals
type: item
subject: Book reviews
  topic: section
creator: Dagmar Radin
rights: Copyright (c) 2026 Dagmar Radin (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-06-08
publication date: 2026-06-08
starting page: 321
ending page: 328
doi: 10.3326/

Exchange rate issues
type: item
subject: Editorials
  topic: section
creator: Balázs Égert
creator: Dubravko Mihaljek
rights: Copyright (c) 2026 Balázs Égert, Dubravko Mihaljek (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 1
ending page: 3
doi: 10.3326/

Inflation in Croatia: a new era of forecasting with machine learning
type: item
description: This paper examines the use of machine learning methods for forecasting inflation in Croatia. Out-of-sample forecasts are generated for multiple horizons using ten models and four alternative sets of input features comprising lags of the target variable, conventional macroeconomic indicators, unconventional variables including Google Trends data, and a combined feature set. Forecast accuracy is assessed across models and relative to a benchmark for the full sample as well as for the periods before and after March 2020 (COVID-19). The results indicate that no single model consistently outperforms others across all settings; however, machine learning methods, particularly tree-based models, deliver superior performance under specific conditions. The forecasts produced by the two best-performing models, SARIMA and LightGBM, exceed the accuracy of the European Commission’s projections. As the first paper to apply machine learning to inflation forecasting in Croatia, this study introduces modern analytical techniques into the Croatian forecasting literature.
subject: Articles
  topic: section
subject: inflation
  topic: keywords
subject: machine learning
  topic: keywords
subject: forecasting
  topic: keywords
subject: macroeconomics
  topic: keywords
subject: Croatia
  topic: keywords
creator: Jakov Čorak
creator: Mihael Brusan
rights: Copyright (c) 2026 Jakov Čorak, Mihael Brusan (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 39
ending page: 65
doi: 10.3326/

Bridging the gap: socioeconomic inequalities in the use of formal and informal home care
type: item
description: This paper examines socioeconomic inequalities in formal and informal home care among Europeans aged 65+, using SHARE data from 27 countries. Results show that health needs – especially age and functional limitations – are the main drivers of care use. However, informal care is more common among lower-income groups, while formal care is concentrated among wealthier and better-educated individuals. Most disparities are explained by horizontal inequities linked to income, education, and marital status, rather than differences in actual care needs. Even after adjusting for health conditions, poorer populations rely more on informal care, indicating unequal access to formal services. The findings underline the need for policies that improve access to formal care, support informal caregivers, and reduce socioeconomic barriers.
subject: Articles
  topic: section
subject: inequality
  topic: keywords
subject: socioeconomics
  topic: keywords
subject: formal care
  topic: keywords
subject: informal care
  topic: keywords
subject: SHARE data
  topic: keywords
creator: Maja Matanić Vautmans
rights: Copyright (c) 2026 Maja Matanić Vautmans (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-06-08
publication date: 2026-06-08
starting page: 241
ending page: 257
doi: 10.3326/

Different strokes for different folks: untangling supply and demand shocks using survey-data to assess sectoral inflationary pressures in Croatia
type: item
description: While inflation has moderated across most of the euro area since its post-pandemic peak, some countries still face above-average price pressures. In Croatia, inflation has slowed but remains persistent, raising questions about its underlying origins. This paper analyses recent inflationary pressures in Croatia, using firmlevel survey data on production constraints and capacity utilization to untangle supply and demand factors in services and manufacturing, considering sectoral inflation divergence. Unlike traditional approaches, our sectoral output gap captures both supply and demand side drivers of inflationary pressures. Findings show that post-pandemic inflation was mainly driven by supply factors, labour and intermediate input shortages, while ongoing demand pressures, especially in services, continue to fuel inflation. By examining structural and cyclical factors we offer new insights into how inflation behaves in smaller euro area economies, which could help policymakers refine their tools for managing inflation since onesize- fits-all solutions may fall short.
subject: Articles
  topic: section
subject: sector-specific output gap
  topic: keywords
subject: survey-data
  topic: keywords
subject: inflation divergence
  topic: keywords
subject: structural Phillips curve
  topic: keywords
subject: Croatia
  topic: keywords
creator: Frane Banić
creator: Guzmán González-Torres
rights: Copyright (c) 2026 Frane Banić, Guzmán González-Torres (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 5
ending page: 37
doi: 10.3326/

Public debt and the dollar
type: item
description: We examine the relationship between the broad dollar exchange rate and public debt, using a global panel of over 140 countries. We show that a broad dollar appreciation is associated with higher public debt in the medium run. This pattern is mostly driven by emerging market and developing economies. We further show that it occurs especially in countries that have higher shares of FX debt and for which the market perceptions of debt sustainability are more adverse.
subject: Articles
  topic: section
subject: public debt
  topic: keywords
subject: fiscal policy
  topic: keywords
subject: broad dollar exchange rate
  topic: keywords
creator: Aaron Mehrotra
rights: Copyright (c) 2026 Aaron Mehrotra (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 67
ending page: 94
doi: 10.3326/

Are taxes too high? A machine-learning approach to Laffer curve estimation
type: item
description: This paper estimates Laffer curves for personal income tax, corporate income tax, and value-added tax across OECD countries. While the Laffer curve is widely used for assessing the revenue effects of taxation, existing empirical estimates typically rely on restrictive functional forms and are vulnerable to misspecification, when the true relationship between tax rates and revenues is unknown. In response to this limitation, this paper develops a model that allows data-driven flexibility and enforces the defining properties of the Laffer curve. The parameters governing the curvature and turning points of the curve depend on a rich set of structural and institutional characteristics while LASSO regularisation mitigates overfitting. The results reveal substantial cross-country heterogeneity in revenue-maximising tax rates among OECD countries and suggest there is limited scope for further revenue mobilisation through higher income tax rates in several countries, while highlighting a comparatively greater fiscal space in consumption taxation.
subject: Articles
  topic: section
subject: optimal taxation
  topic: keywords
subject: Laffer curve
  topic: keywords
subject: macroeconomic modelling
  topic: keywords
subject: LASSO
  topic: keywords
creator: Hermes Morgavi
rights: Copyright (c) 2026 Hermes Morgavi (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-06-08
publication date: 2026-06-08
starting page: 287
ending page: 319
doi: 10.3326/

Our Dollar, Your Problem
type: item
subject: Book reviews
  topic: section
creator: Mislav Brkić
rights: Copyright (c) 2026 Mislav Brkić (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 159
ending page: 165
doi: 10.3326/

The influence of education on social mobility in Croatia and Greece: a comparative analysis
type: item
description: This paper explores social mobility in Greece and Croatia among individuals born between 1950-2000, focusing on the role of education in occupational and educational mobility. We draw information on both dimensions from the European Union Statistics on Income and Living Conditions (EU-SILC) survey. When intergenerational educational mobility is examined our findings show a downward trend of upward mobility with the outcomes being better for women in both countries. They also suggest that individuals whose parents have a low level of education are significantly less likely to complete tertiary education than those whose parents have higher levels of education. Exploring intergenerational occupational mobility as an indicator of relative mobility reveals a growing persistence of the influence of parental occupational status on children’s outcomes. Although the influence of education is slightly stronger in Greece, higher educational levels increase the probability of upward occupational mobility in both countries.
subject: Articles
  topic: section
subject: social mobility
  topic: keywords
subject: educational mobility
  topic: keywords
subject: intergenerational occupational mobility
  topic: keywords
subject: human capital
  topic: keywords
subject: Croatia
  topic: keywords
subject: Greece
  topic: keywords
creator: Georgios Kitsoleris
creator: Sara Čulo
rights: Copyright (c) 2025 Georgios Kitsoleris, Sara Čulo (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-12-03
publication date: 2025-12-03
starting page: 615
ending page: 643
doi: 10.3326/

Currency depreciation and inflationary pressure vis-à-vis monetary intervention: perspectives on growth and policy implications
type: item
description: This study investigates the effects of currency depreciation, inflation, and efforts to offset depreciation through foreign exchange intervention in a sample of ten Sub-Saharan African countries considered to have had the worst performing currencies from 1990 to 2023. Using dynamic ordinary least squares and error correction estimation techniques we show that depreciation and inflation have significant negative effects on growth, which cannot be offset by central bank interventions. Gross fixed investment and trade openness help promote growth. Diagnostic tests indicate that the estimates are reliable. They are also robust to the exclusion of several explanatory variables. We find a bidirectional Granger causality between currency depreciation and growth, and strong predictive capacity of the estimated model. These findings provide support for the view that greater exchange rate flexibility does not help promote exports and growth in economies with pronounced structural weaknesses and inefficient macroeconomic policies.
subject: Articles
  topic: section
subject: currency depreciation
  topic: keywords
subject: inflation
  topic: keywords
subject: foreign exchange intervention
  topic: keywords
subject: economic growth
  topic: keywords
subject: exchange rates
  topic: keywords
subject: developing economies
  topic: keywords
subject: Sub-Saharan African countries
  topic: keywords
creator: Samson Edo
creator: Eseosa Joy Sowemimo
rights: Copyright (c) 2026 Samson Edo, Eseosa Joy Sowemimo (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 141
ending page: 158
doi: 10.3326/

When the guns roar: how the war, reserves and exports shape Ukraine’s cost of external borrowing
type: item
description: This study examines factors shaping Ukraine’s cost of external borrowing amid the 2022 Russian invasion. It focuses on the impact of the intensity of military activities, the size of central bank reserve assets, and the volume of grain and oilseed exports on sovereign bond spreads. Estimates from an ARDL model with data from September 2021 to July 2024 suggest a stable long-term relationship between the spreads, military activities and reserve assets, with escalating military actions widening the spreads and larger reserves narrowing them. The effects of exports on the spreads are not statistically significant, probably reflecting the difficulty to transport large quantities of grain and oilseeds in wartime conditions. The findings underscore the role of monetary policy in managing the cost of external borrowing, and the importance of foreign exchange reserves in mitigating sovereign debt and foreign exchange market risks in wartime conditions.
subject: Articles
  topic: section
subject: external borrowing
  topic: keywords
subject: sovereign spreads
  topic: keywords
subject: war
  topic: keywords
subject: international reserves
  topic: keywords
subject: commodity exports
  topic: keywords
creator: Sergii Sheludko
rights: Copyright (c) 2026 Sergii Sheludko (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 95
ending page: 115
doi: 10.3326/

Optimal fiscal policies in booms and recessions: a case study for Slovenia
type: item
description: Optimal fiscal policies are determined for Slovenia for the next few years under alternative assumptions about global developments. We construct a baseline scenario, two scenarios with a recession and two with a boom, each with a demand side and a supply side shock. We use the macroeconometric model SLOPOL12 and assume an intertemporal objective function for Slovenian policy makers containing the main targets derived from a survey among policy makers as arguments. Approximately optimal policies are calculated for all scenarios. Fiscal policies are characterized by an unequal design for dealing with the trade-off between output stabilization and budgetary sustainability: instruments with demand side and supply side effects (direct taxes and public investment) are used for output and employment stabilization, while government consumption and other instruments with only demand side effects are assigned to budget consolidation. The results are rather similar in the different scenarios and only mildly counter-cyclical.
subject: Articles
  topic: section
subject: macroeconomics
  topic: keywords
subject: fiscal policy
  topic: keywords
subject: dynamic optimization
  topic: keywords
subject: Slovenia
  topic: keywords
creator: Dmitri Blueschke
creator: Klaus Weyerstrass
creator: Reinhard Neck
creator: Miroslav Verbič
rights: Copyright (c) 2025 Dmitri Blueschke, Klaus Weyerstrass, Reinhard Neck, Miroslav Verbič (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-12-03
publication date: 2025-12-03
starting page: 499
ending page: 526
doi: 10.3326/

35 Years of Public Sector Reform in Central Europe
type: item
subject: Book reviews
  topic: section
creator: Hrvoje Hrnkaš
rights: Copyright (c) 2025 Hrvoje Hrnkaš (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 493
ending page: 498
doi: 10.3326/

Assessing the impact of labour market spendings on unemployment dynamics across demographics in OECD countries
type: item
description: This study investigates the long-run effects of labour market policies on unemployment dynamics in 36 OECD countries from 2004 to 2022. Derived from second-generation panel methods that address cross-sectional dependence and heterogeneity, the results indicate that activation policies without providing employment maintenance incentives are associated with higher unemployment. Institutional and public training expenditures mainly reduce youth unemployment, while minimum income benefits and wages contribute to higher adult and total unemployment, reflecting disincentivising effects and wage rigidities. Rising labour force participation increases measured unemployment by re-engaging marginally attached workers. Robustness checks across sub-periods and welfare-regime clusters reveal heterogeneity, showing that policy effects are context-dependent and time-sensitive rather than uniformly stable. Causality tests confirm two-way interactions between unemployment and labour market policies. These findings underscore the need for nuanced, age-specific strategies that integrate activation measures, targeted training, and carefully calibrated income support to promote inclusive and effective labour markets in advanced economies.
subject: Articles
  topic: section
subject: active labour market policies (ALMPs)
  topic: keywords
subject: institutional training
  topic: keywords
subject: minimum income benefits
  topic: keywords
subject: wages rigidity
  topic: keywords
subject: unemployment rate
  topic: keywords
subject: panel data analysis
  topic: keywords
creator: Osama Shaikh
creator: Selcen Ozturk
rights: Copyright (c) 2025 Osama Shaikh, Selcen Ozturk (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-12-03
publication date: 2025-12-03
starting page: 527
ending page: 562
doi: 10.3326/

Convergence of European healthcare systems: a cluster analysis
type: item
description: This paper examines whether European healthcare systems can be meaningfully grouped into distinct clusters based on institutional characteristics and health outcomes. To address this question, we conduct a cluster analysis of 26 European countries over the period 2001-2021. The findings provide limited empirical support for the conventional classification into Nordic, Continental, and Liberal models within the healthcare domain, both in terms of institutional features and health outcomes. Rather, most Western European countries cluster together, while a distinct and robust cluster of Eastern European countries clearly emerges.
subject: Articles
  topic: section
subject: health
  topic: keywords
subject: welfare state
  topic: keywords
subject: cluster
  topic: keywords
subject: Europe
  topic: keywords
subject: Esping-Andersen
  topic: keywords
creator: Paolo Liberati
rights: Copyright (c) 2026 Paolo Liberati (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-06-08
publication date: 2026-06-08
starting page: 167
ending page: 213
doi: 10.3326/

The role of pay-for-performance in promoting integrated care
type: item
description: This work discusses the role pay-for-performance schemes (P4Ps) have in mitigating coordination problems between two sequentially organized providers (first and second). We analyse global budgets as well as three P4Ps that differ with respect to the targeted provider (the first, the second or both). It follows that global budgets introduce coordination problems being reduced when P4Ps are brought in. With respect to coordination, P4Ps that target the first provider do better than P4Ps that target the second provider due to the first provider having sole responsibility for some coordination problems. Furthermore, the optimal P4Ps are found, not only to define optimal quality levels, but also to depend on the providers’ altruism, the providers’ productivity, their position in the production chain and spill-over effects. The collection of relevant information will thus be costly for P4Ps, and it cannot be ruled out that global budgets do better than the optimal P4Ps.
subject: Articles
  topic: section
subject: vertical relations
  topic: keywords
subject: inter-organizational coordination
  topic: keywords
subject: client-regarding preferences
  topic: keywords
creator: Sverre Grepperud
creator: Pål Andreas Pedersen
rights: Copyright (c) 2025 Sverre Grepperud, Pål Andreas Pedersen (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-12-03
publication date: 2025-12-03
starting page: 563
ending page: 590
doi: 10.3326/

Determinants of tax morale among university students in Croatia
type: item
description: This study aims to identify the main determinants of tax morale among university students in Croatia. The partial least squares structural equation modelling (PLSSEM) approach has been used, and the results show that trust in institutions, religious principles and tax knowledge positively influence the tax morale of university students. Contrary, politics, social norms, and financial knowledge negatively influence tax morale. Higher financial knowledge lowers tax morale, while students who believe that the state should have a greater influence on the economy have higher tax morale. Moreover, there are some differences in attitudes towards tax morale according to gender, age and place of birth. The research shows a general lack of tax knowledge among students, indicating a need for improved tax education initiatives. By incorporating these findings into policy and curriculum design, governments can cultivate a culture of compliance among future taxpayers, ultimately contributing to more effective and equitable tax systems.
subject: Articles
  topic: section
subject: tax morale
  topic: keywords
subject: university students
  topic: keywords
subject: Croatia
  topic: keywords
subject: PLS-SEM approach
  topic: keywords
creator: Josip Visković
creator: Tea Šestanović
creator: Paško Burnać
rights: Copyright (c) 2025 Josip Visković, Tea Šestanović, Paško Burnać (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-12-03
publication date: 2025-12-03
starting page: 645
ending page: 666
doi: 10.3326/

Explaining wage developments in Croatia: the role of the firm composition effect
type: item
description: While wage developments are primarily driven by changes in real economic activity, the role of labour force allocation is often overlooked. Using Croatian establishment-level data (2002-2023), we apply static and dynamic Olley-Pakes decompositions to assess how labour reallocation impacts wages and productivity. The wage allocation premium, defined as the ratio between actual aggregate wage and wage under random worker distribution, reveals a countercyclical impact until 2021, turning procyclical after the pandemic. Dynamic decomposition supports these findings and demonstrates that entering firms depress average wages, while exiting firms raise them slightly. Applying the same approach to productivity, we find that labour reallocation mitigated productivity losses during the recession and moderated growth during the recovery. Unlike wage patterns, this countercyclical effect on productivity persisted post-pandemic. Since 2020, wage allocation premium growth has outpaced the gross value added (GVA) allocation premium, which may have pressured firms to raise prices, potentially contributing to inflation.
subject: Articles
  topic: section
subject: wages dynamics
  topic: keywords
subject: decomposition
  topic: keywords
subject: allocation premium
  topic: keywords
subject: productivity
  topic: keywords
subject: firm composition effect
  topic: keywords
creator: Josip Raos
creator: Ivana Čičak
rights: Copyright (c) 2025 Josip Raos, Ivana Čičak (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 395
ending page: 429
doi: 10.3326/

Overeducated yet underskilled: graduate labour market mismatch in Morocco and Serbia
type: item
description: This paper analyses the phenomenon of qualification and skill mismatch among university graduates in two countries in Morocco and Serbia. These countries are located within the super-periphery of the EU and face similar challenges in fostering competitive economies capable of trading with and receiving investment from their northern neighbours. Effective skill development and successful labour market matching of university graduates are crucial instruments to meet these challenges. We explore the different dimensions of this requirement based on an analysis of qualification and skill mismatch on the graduate labour market. Our survey reveals simultaneous overqualification and underskilling of university graduates, a high incidence of graduate mismatch combined with low-wage penalties in the public sector, high levels of mismatch and associated relatively high-wage penalties among women graduates, and an amelioration of skill mismatch over time due to on-the-job learning and job switching.
subject: Articles
  topic: section
subject: ualification mismatch
  topic: keywords
subject: skill mismatch
  topic: keywords
subject: higher education systems
  topic: keywords
subject: graduate labour markets
  topic: keywords
subject: Morocco
  topic: keywords
subject: Serbia
  topic: keywords
creator: Ivana Prica
creator: Imane El Ouizgani
creator: Will Bartlett
rights: Copyright (c) 2025 Ivana Prica, Imane El Ouizgani, Will Bartlett (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 469
ending page: 492
doi: 10.3326/

Time gap between termination of paid parental leave and eligibility for early childhood education and care services in Croatia
type: item
description: Parental leave is essential for supporting women’s participation in the labour market, while accessible and affordable childcare is equally important for their return to work. This study examines the care gap in Croatia, defined as the period between the end of paid parental leave and the start of early childhood education and care (ECEC). Data from an anonymous online survey were analysed using logistic regression to identify predictors of this gap. The results confirm its presence and show that it affects mothers disproportionately, as many adjust their employment during this period. The probability of a care gap is lower in larger local government units (LGUs) and for children born later in the year. These findings highlight the importance of aligning parental leave and ECEC enrolment policies to promote gender equality and support a better work-life balance for families.
subject: Articles
  topic: section
subject: childcare
  topic: keywords
subject: parental leave
  topic: keywords
subject: care gap
  topic: keywords
subject: gender equality Croatia
  topic: keywords
creator: Ana Marija Sikirić Simčić
rights: Copyright (c) 2025 Ana Marija Sikirić Simčić (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-12-03
publication date: 2025-12-03
starting page: 591
ending page: 614
doi: 10.3326/

Effects of reputation and monetary policy communication on exchange rate uncertainty: evidence from an emerging market economy
type: item
description: This paper examines whether central bank reputation and communication attenuated exchange rate uncertainty in Colombia over 2007-21. Uncertainty is measured by means of disagreements and forecast errors of the dollar exchange rate. We construct a central bank reputation index, an index of the clarity of its policy meeting minutes, and a measure of central bank board dissent. We control for the Colombia – US interest rate differential, inflation expectations disagreement, economic policy uncertainty, and special oil industry factors. We estimate equations via GMM and assess robustness with ARDL and VAR models. The findings indicate that a stronger central bank reputation and clearer communication reduce exchange rate uncertainty. Unanimous monetary policy decisions reduce disagreements concerning expectations, while external shocks such as new fracking activities exacerbate volatility. These results underscore the importance of enhancing transparency and cohesion in monetary policy decisions to mitigate uncertainty in foreign exchange markets.
subject: Articles
  topic: section
subject: exchange rate uncertainty
  topic: keywords
subject: monetary policy
  topic: keywords
subject: communication
  topic: keywords
subject: emerging economy
  topic: keywords
subject: reputation
  topic: keywords
creator: Juan Camilo Anzoátegui Zapata
creator: Danilo Rodríguez Arango
creator: Sergio David Sánchez Varela
rights: Copyright (c) 2026 Juan Camilo Anzoátegui Zapata, Danilo Rodríguez Arango, Sergio David Sánchez Varela (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-03-18
publication date: 2026-03-18
starting page: 117
ending page: 140
doi: 10.3326/

Public debt and GDP growth in BRICS: unravelling time-scale complexities through wavelet analysis
type: item
description: This study examines the impact of public debt on economic growth in BRIC nations – Brazil, Russia, India, and China – over 1996-2022 using wavelet coherence and cross-wavelet analysis to capture both short-term dynamics and longterm trends. The findings reveal a positive but heterogeneous co-movement between public debt and GDP, intensifying during COVID-19. Russia exhibits short-to-medium-term co-movement, while Brazil, India, and China show mediumto-long-term patterns. In Brazil and Russia, public debt drives growth during economic distress, whereas in India and China, growth leads to debt accumulation. Granger causality tests confirm the directionality of these relationships, supporting the robustness of the wavelet-based results. The study highlights the need for tailored debt management strategies aligned with country-specific economic conditions to support sustained and inclusive growth.
subject: Articles
  topic: section
subject: public debt
  topic: keywords
subject: economic growth
  topic: keywords
subject: BRICS
  topic: keywords
subject: wavelet analysis
  topic: keywords
subject: emerging nations
  topic: keywords
subject: COVID-19
  topic: keywords
creator: Ajaz Ayoub
creator: Tahir Ahmad Wani
creator: Abid Sultan
rights: Copyright (c) 2025 Ajaz Ayoub, Tahir A Wani, Abid Sultan (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 369
ending page: 393
doi: 10.3326/

WISEs and their potential to transform the Croatian skill-formation regime
type: item
description: Work Integration Social Enterprises (WISEs) combine social and economic goals and support vulnerable groups by offering employment and skill development opportunities. This paper explores their potential to transform Croatia’s skill-formation regime. By analysing data from 13 European countries, we examine the current state of WISEs in Croatia, assess their capacity to influence skill development practices and position them in a broader post-socialist context. The findings suggest that while Croatian WISEs are limited by the small size of the sector, the absence of systematic support and comparative underinvestment in staff, they still hold the potential to transform the Croatian skill formation regime in the direction a more coordinated/collectivized approach. Authors recommend introducing a clearer distinction between WISEs primary orientated towards permanent or transitional labour market integration; and incentivizing WISEs oriented towards transitional integration to engage with the provision of vocational education and training, adult education and active labour market policy.
subject: Articles
  topic: section
subject: work integration,
  topic: keywords
subject: work integration social enterprises
  topic: keywords
subject: social enterprises
  topic: keywords
subject: skill formation
  topic: keywords
subject: Croatia
  topic: keywords
creator: Nikola Buković
rights: Copyright (c) 2025 Nikola Buković (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 431
ending page: 456
doi: 10.3326/

An economic analysis of leisure-proportional benefits in a small open economy
type: item
description: This paper analyses the impact of public pensions on resource allocation in a small open economy. In particular, we focus on the economic implications of leisure-proportional benefits. It is well known that a pay-as-you-go scheme can improve social welfare when the population growth rate exceeds the interest rate, which we call the “Aaron effect”. We analyse the changes in labour supply, savings, and social welfare from an increase in the public pension taking into account the Aaron effect. We obtain the following results. First, we show that the effect of public pensions on labour supply includes the Aaron effect, but regardless of its sign, labour supply decreases as public pensions increase. Second, the effect of public pensions on savings does not include the Aaron effect, and savings decrease as public pensions increase. Third, the effect of the introduction of public pensions on social welfare consists only of the Aaron effect.
subject: Articles
  topic: section
subject: ocial security
  topic: keywords
subject: endogenous retirement
  topic: keywords
subject: labour supply
  topic: keywords
subject: savings
  topic: keywords
subject: social welfare
  topic: keywords
creator: Wataru Kobayashi
creator: Junichiro Takahata
rights: Copyright (c) 2025 Wataru Kobayashi, Junichiro Takahata https://creativecommons.org/licenses/by-nc/4.0
date: 2025-06-08
publication date: 2025-06-08
starting page: 239
ending page: 250
doi: 10.3326/pse.49.2.3

Governance quality vs. stimulus size: fiscal policy effectiveness during the COVID-19 pandemic
type: item
description: Given the importance of good governance for the efficiency of government spending, this study reveals the role of governance quality in fiscal policy effectiveness during the COVID-19 outbreak. Using cross-country threshold regressions for 144 countries, we find that a stringent lockdown policy (i) does not lead to economic downturn in countries with larger fiscal stimulus, (ii) leads countries with poor governance quality to head toward economic slowdown even with higher stimulus packages, (iii) does contribute to economic recovery even in countries with smaller fiscal packages if accompanied by higher governance quality. Overall, the results suggest that good governance helps achieve economic recovery, whereas an increase in the size of the fiscal stimulus can, at best, help protect against economic slowdown. The empirical findings have several implications for policymakers in countries where the blow hits the hardest, as well as for fiscal governance framework.
subject: Articles
  topic: section
subject: fiscal stimulus
  topic: keywords
subject: governance quality
  topic: keywords
subject: COVID-19
  topic: keywords
creator: Mert Topcu
creator: Mustafa Alpin Gulsen
rights: Copyright (c) 2025 Mert Topcu, Mustafa Alpin Gulsen https://creativecommons.org/licenses/by-nc/4.0
date: 2025-06-08
publication date: 2025-06-08
starting page: 251
ending page: 272
doi: 10.3326/pse.49.2.4

Excellence comes from distance: the case of a Croatian higher education institution
type: item
description: In this paper, we empirically test the impact of motivation on educational outcomes by using distance to home region as a proxy variable. The data come from the Faculty of Economics and Business, University of Rijeka. We develop two econometric models with GPA and number of courses passed as dependent variables, while controlling for physical distance from the home region to Rijeka and students’ educational abilities. Our results show that distance negatively affects the number of courses passed, but has no effect on GPA. We argue that these results show that distance from the home region is a strong motivating factor for earlier rather than later graduation and that educational policies at the faculty level are needed to increase the motivation of local students to stay level with their “foreign” peers. This would help to minimize opportunity costs for local students and lower the student to academic staff ratio.
subject: Articles
  topic: section
subject: cost of education
  topic: keywords
subject: educational outcomes
  topic: keywords
subject: student motivation
  topic: keywords
subject: student cost of living
  topic: keywords
creator: Vinko Zaninović
creator: Zoran Ježić
creator: Alen Host
rights: Copyright (c) 2025 Vinko Zaninović, Zoran Ježić, Alen Host (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 457
ending page: 468
doi: 10.3326/

Is it worth raising the normal retirement age? A new model to estimate the employment effects
type: item
description: Pension reforms, that raise the normal retirement ages, are crucial yet controversial in ageing developed countries. While cross-country studies confirm positive significant effects, their estimated effects are modest compared to those from country-specific studies using micro data. This study attempts to reconcile these differences by introducing greater heterogeneity into the cross-country approach. Starting from a standard cross-country panel error correction model, several empirical innovations are introduced to better capture the influence of the demographic composition of countries, the possibility of retiring at an earlier age, and the importance of private pension funds and early exit pathways. These changes result in larger and more heterogeneous predicted effects of changes in the normal retirement ages on the older-age employment rate and average age of labour market exit across countries. The proposed model, allows for simulations on the effects of pension policy reforms.
subject: Articles
  topic: section
subject: normal retirement ages
  topic: keywords
subject: employment rate
  topic: keywords
subject: labour market policy
  topic: keywords
subject: older workers
  topic: keywords
creator: Hermes Morgavi
rights: Copyright (c) 2025 Hermes Morgavi (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2025-09-03
publication date: 2025-09-03
starting page: 339
ending page: 367
doi: 10.3326/

Analysing the impact of migration flows on regional per capita GDP in Türkiye: a spatial panel data approach
type: item
description: This paper investigates the effects of net international and internal migration on per capita GDP in Türkiye’s 81 provinces. Unlike prior research, it analyses both migration types within the same spatial panel model and accounts for spatial dependence. The first model (2016-22) examines overall migration effects, the second (2009-22) focuses on the effects of migrants’ educational levels. We find that net international immigration significantly boosts per capita, GDP, with highly educated migrants contributing more to growth. The robustness checks further highlight the complementary role of financial deepening in boosting regional economic performance.
subject: Articles
  topic: section
subject: internal migration
  topic: keywords
subject: international migration
  topic: keywords
subject: financial inclusion
  topic: keywords
subject: per capita GDP
  topic: keywords
subject: spatial panel data analysis
  topic: keywords
creator: Ali Osman Öztop
creator: Tuna Köse
rights: Copyright (c) 2026 Ali Osman Öztop, Tuna Köse (Author) https://creativecommons.org/licenses/by-nc/4.0
date: 2026-06-08
publication date: 2026-06-08
starting page: 259
ending page: 286
doi: 10.3326/

Climate finance, institutions and innovation systems in Sub-Saharan Africa
type: item
description: To enhance climate finance’s effectiveness in Sub-Saharan Africa (SSA) and explore how it can be deployed to boost innovation, this study has explored the effect of climate finance combined with institutional quality on innovation while emphasizing the multidimensional measurement approach to innovation. Using data from twenty-three (23) countries in SSA spanning the period 2011 to 2022 and the system Generalized Method of Moment (GMM) estimator, the results from the study show a negative and significant effect of climate finance on innovation in SSA. Also, we found that institutional quality has a positive and significant effect on innovation. Further, we realized from the conditional effect results that when the level of institutions in SSA is highly effective, the positive effect of climate finance on innovation is magnified. Given these findings, this study recommends that policies to improve climate finance in SSA should be pursued simultaneously with policies promoting strong institutions.
subject: Articles
  topic: section
subject: climate finance
  topic: keywords
subject: innovation
  topic: keywords
subject: institutions
  topic: keywords
subject: climate mitigation
  topic: keywords
subject: climate adaptation
  topic: keywords
subject: Sub-Saharan Africa
  topic: keywords
creator: Frank Adu
creator: Roshelle Ramfol
rights: Copyright (c) 2025 Frank Adu, Professor https://creativecommons.org/licenses/by-nc/4.0
date: 2025-06-08
publication date: 2025-06-08
starting page: 309
ending page: 337
doi: 10.3326/pse.49.2.6