Poverty in Russia during the Transition: An Overview

It is no surprise that the breakup of the Soviet Union and the overall demise of the planned economy has had a profound effect on the welfare of the Russian people. But the absence of reliable survey data has constrained our understanding of the impact that transition has had on the distribution of income. This article draws upon several rounds of a nationally representative household survey to document the sharp increases in the incidence and severity of poverty that have occurred during the transition. We investigate the routes by which macroeconomic and structural developments have been transmitted through the labor market and examine the performance of an increasingly overburdened, unfocused, and inadequate system of social protection. There is no evidence to suggest that the poor have shared in Russia’s emerging economic recovery, and the emergence of a core group of long-term poor appears to be a distinct possibility.