Poverty and Social Structure in Russia: An Analysis of the First Decade of Transition

Abstract

This paper has four main objectives: (1) to monitor the rise of poverty and income inequality during the first decade of Russian transition; (2 to analyze the performance of the welfare state in reducing poverty and income inequality; (3) to identify the most vulnerable groups of transition; and (4) to elucidate the changes occurring in the social structure in terms of wage and income differences. The empirical evidences provided in the paper lead to the conclusion that the impact of the Russian welfare state has been rather limited with welfare institutions having only marginally succeeded in reducing poverty among people in need. This study has also highlighted how the Russian society is now slowly acquiring those characteristics of differentiation present in Western societies, which for so many years had been advocated by the population. Unfortunately, differentiation in wages has also implied a dramatic and excessive differentiation in life standards and opportunities. These are all challenges that the Russian welfare state is called to deal with. The individualization and monetarization of risks are, in fact, accentuating the self-perpetuating character of poverty, especially for children, elderly, large families with children, single mothers, farmers, manual workers, unemployed and social assistance beneficiaries.

Keywords: Russian Federation, social policy, social structure, welfare state, social transfers, poverty

JEL Classification: P26, P30, P51, O10, N30, J18, D61, D31