Changing Ideas about Poverty in Russia

Ref. no. 681-42

In the transition to a market system the Russian economy has experienced a series of shocks--a sharp fall in output, rapid and continuing inflation, and the appearance of open unemployment. These shocks have led to a substantial fall in real wages. There has also been a marked increase in income inequality as the enterprising took advantage of new opportunities--and the lucky reaped windfall gains. While some Russians have prospered, most have seen a fall in their standard of living.

This research project aims to analyze how the ideas about poverty in Russia--particularly the subsistence minimum and the subjective poverty line--have evolved during this period of unprecedented changes. The sharp decline in income makes it possible to see, within a very compressed period, how ideas about poverty respond to abrupt changes in overall income and in income distribution. The study will explore how these ideas differ among socioeconomic and demographic groups. It will also assess the importance of various factors in explaining the speed with which attitudes toward poverty respond to changes in the external environment. The study should yield important findings for policymakers about which social and demographic groups adjust their expectations more slowly and where the gaps between at least nominally guaranteed minimums and the perception of what a minimum should be are the widest.

The research is based on the results of a survey carried out by the All-Russian Center for Monitoring of Public Opinion (VCIOM). In this survey a representative sample of Russian households was asked a Leyden-type question (on the subjective subsistence minimum) monthly between March 1993 and January 1994 and about every other month from then until late 1996. The information from this repeated cross-sectional survey, covering three years, will be used to establish a series of subjective poverty lines for Russia.

Responsibility: Policy Research Department, Poverty and Human Resources Division--Branko Milanovic (bmilanovic@worldbank.org) and Yvonne Ying. With Alastair McAuley, University of Essex and New Moscow Economic School; and Svetlana Sidorenko, VCIOM, Moscow.

Completion date: June 1998.

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