Poverty Trends in Russia: a Russian Perspective 119 Nataliya Rimashevskaya 6
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U& A"NoN Economic Development Institute 1P,Oof> The World Bank Public Disclosure Authorized Poverty in Russia Public Policy and Private Responses Public Disclosure Authorized Edited by Jeni Klugman Public Disclosure Authorized EDI DEVELOPMENT STUDIES Public Disclosure Authorized Other EDI Development Studies (In order of publication) EnterpriseRestructuring and EconomicPolicy in Russia Edited by Simon Commander, Qimiao Fan, and Mark E. Schaffer InfrastructureDelivery: Private Initiative and the PublicGood Edited by Ashoka Mody Trade,Technology, and InternationalCompetitiveness Irfan ul Haque CorporateGovernance in TransitionalEconomies: InsiderControl and theRole of Banks Edited by Masahiko Aoki and Hyung-Ki Kim Unemployment,Restructuring, and the LaborMarket in EasternEurope and Russia Edited by Simon Commander and Fabrizio Coricelli Monitoringand EvaluatingSocial Programs in DevelopingCountries: A HandbookforPolicymakers, Managers, and Researchers Joseph Valadez and Michael Bamberger AgroindustrialInvestment and Operations James G. Brown with Deloitte & Touche LaborMarkets in an Era of Adjustment Edited by Susan Horton, Ravi Kanbur, and Dipak Mazumdar Vol. I. IssuesPapers; Vol. 2. CaseStudies DoesPrivatization Deliver? Highlightsfrom a WorldBank Conference Edited by Ahmed Galal and Mary Shirley The AdaptiveEconomy: Adjustment Policies in Small,Low-Income Countries TonyKillick FinancialRegulation: Changing the Rulesof the Game Edited by Dimitri Vittas The Distributionof Incomeand Wealthin Korea Danny Leipziger and others PublicEnterprise Reform: The Lessonsof Experience Mary Shirley and John Nellis (Also available in French and Spanish) Privatizationand Controlof State-OwnedEnterprises Edited by Ravi Ramamurti and Raymond Vernon Financeat theFrontier: Debt Capacity and the Roleof Credit in the PrivateEconomy J. D. Von Pischke EDI DEVELOPMENTSTUDIES Poverty in Russia Public Policy and Private Responses Edited by Jeni Klugman The World Bank Washington, D.C. Copyright © 1997 The International Bank for Reconstruction and Development / THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing May 1997 The Economic Development Institute (EDT)was established by the World Bank in 1955 to train officials concerned with development planning, policymaking, investment analysis, and project implementation in member developing countries. At present the substance of the EDI's work emphasizes macroeconomic and sectoral economic policy analysis. Through a variety of courses, seminars, and workshops, most of which are given overseas in cooperation with local institutions, the EDI seeks to sharpen analytical skills used in policy analysis and to broaden understanding of the experience of individual countries with economic development. Al- though the EDI's publications are designed to support its training activities, many are of interest to a much broader audience. EDI materials, including any findings, interpretations, and conclusions, are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent. Because of the informality of this series and to make the publication available with the least possible delay, the manuscript has not been edited as fully as would be the case with a more formal document, and the World Bank accepts no responsibility for errors. Some sources cited in this book may be informal documents that are not readily available. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be sent to the Office of the Publisher at the address shown in the copyright notice above. The World Bank encourages dissemination of its work and will normally give permission promptly and, when the reproduction is for noncommercial purposes, without asking a fee. Permission to copy portions for classroom use is granted through the Copyright Clearance Center Inc., Suite 910, 222 Rosewood Drive, Danvers, Massachusetts 01923, U. S. A. The backlist of publications by the World Bank is shown in the annual Index of Publications, which is available from Distribution Unit, Office of the Publisher, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, Banque mondiale, 66, avenue d'1ena, 75116 Paris, France. At the time of writing, Jeni Klugman was an economist in the Human Resources Development Division of the World Bank's Europe and Central Asia Department III. Library of Congress Cataloging-in-Publication Data Poverty in Russia: public policy and private responses / edited by leni Klugman. p. cm.-(EDI development studies, ISSN 1020-105X) Includes bibliographical references (p. ) and index. ISBN 0-8213-3803-X 1. Poverty-Russia (Federation) 2. Unemployment-Russia (Federation) 3. Russia (Federation)-Economic conditions-1991- I. Klugman, Jeni, 1964- . PI.World Bank. III. Series. HC340.12.Z9P66 1997 362.5'0947-DC20 96-41540 CIP Contents Foreword v Acronyms and Abbreviations vii Preface ix Acknowledgments xi Contributors xiii 1. Introduction and Overview 1 Jeni Klugmanand JeanineD. Braithwaite Part I: Dimensions of Poverty 2. The Old and New Poor in Russia 29 JeanineD. Braithwaite 3. Static and Dynamic Analyses of Poverty in Russia 65 Mark C. Foley 4. Health and Nutritional Aspects of Well-Being 91 VenanzioVella 5. Poverty Trends in Russia: A Russian Perspective 119 Nataliya Rimashevskaya 6. Russian Unemployment: Its Magnitude, Characteristics, and Regional Dimensions 133 Simon Commanderand Ruslan Yemtsov 7. Characteristics of the Unemployed 165 Simon Commanderand Ruslan Yemtsov iii iv Contents Part Il: Public Policy and Private Responses 8. The Impact of Social Support: Errors of Leakage and Exclusion 189 Mark C. Foley and Jeni Klugman 9. Family Safety Nets during Economic Transition 211 Donald Cox, Zekeriya Eser, and Emmanuel Jimenez 10. Public Opinion about Social Issues 249 Larisa Zubova and Natalia Kovalyova References 263 Index 275 Foreword Russia's transition to a market economy has been accompanied by a sharp rise in the incidence and severity of poverty. Almost daily, reports in local and Western media cite increasing poverty and hardship and widening income distribution in Russia. The image of the elderly babushkabegging outside Est6e Lauder on Gorky Street has loomed large in popular percep- tions about the social impact of the transition. Yet to date, most reports have been based on anecdotal evidence or on officialstatistics, both of which have serious drawbacks. This volume provides rigorous quantitative analysis of the impact of transition on the well-being of individuals and households in Russia. Con- tributions by Bank staff as well as by Russian and Western academics range across subjects such as the measurement of poverty and distribution, the responses of individual Russians, and the impact of existing government programs. The results provide important insights for governments, aca- demics, donors, and international financial institutions that are concerned about the social impact of transition. Vinod Thomas Director Economic Development Institute v Acronyms and Abbreviations BMI body mass index CPI consumer price index FBS Family Budget Survey FES Federal Employment Service GDP gross domestic product Goskomstat State Committee of the Russian Federation for Statistics ILO International Labor Organization IMF International Monetary Fund LFS labor force survey MCB minimum consumption basket OECD Organization for Economic Cooperation and Development OLS ordinary least squares PSUs RLMS survey sites RLMS Russian Longitudinal Monitoring Survey Rub rubles SCF Social Consumption Fund SD standard deviation SSSR Soyuz Sovetskih Sotsialisticheskih Respublik (Union of Soviet Socialist Republics) TSEK Center for Economic Analysis and Forecasting UNICEF United Nations Children's Fund VCIOM All-Russian Center for Public Opinion Research VCUZ All-Russian Center for Public Opinion (Ministry of Labor) WHO World Health Organization vii Preface This volume evolved from a series of background papers that the World Bank commissioned for a poverty assessment for Russia in 1995. The pa- pers provided a wealth of information on, and insights into, issues of pov- erty and distribution in Soviet and contemporary Russia that had never before been widely available. The primary motivation for publishing this more comprehensive, analytical volume was to disseminate the knowledge gained and the systematic analysis undertaken in the course of writing a summary report on poverty in Russia. This would not have been possible without the enthusiasm and professionalism of all the contributors, who spent long hours puzzling over and clarifying the findings that emerged. It is especially gratifying to produce a volume that involves the foremost Rus- sian scholars working in the field. ix Acknowledgments Many people deserve acknowledgment for their support in enabling this volume to be published. First of all, in the Europe and Central Asia De- partment of the World Bank, Director Yukon Huang, Robert Liebenthal, and Costas Michalopoulos have all been supportive in numerous, substan- tive ways. Colleagues inside the Bank and in academia reviewed drafts of the chapters. In particular, I would like to thank Billy Jack, Alexandre Kolev, Peter Lanjouw, John Micklewright, and Branko Milanovic. Annie Minofu deserves special mention for her tireless and cheerful