Poverty and Shared Prosperity in Russia : Deconstructing Russia’s Shared Prosperity Success -- The Role of Labor and Non-Labor Income
The Russian Federation has sustained significant growth over the past decade, accompanied by high rates of income mobility for all groups in the population. The positive outcomes in economic growth were accompanied by economic mobility for most hou...
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| Language: | English en_US |
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Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/05/24667312/russia-poverty-shared-prosperity-russia-deconstructing-russia’s-shared-prosperity-success-role-labor-non-labor-income http://hdl.handle.net/10986/22272 |
| Summary: | The Russian Federation has sustained
significant growth over the past decade, accompanied by high
rates of income mobility for all groups in the population.
The positive outcomes in economic growth were accompanied by
economic mobility for most households, reflected in
substantial poverty reduction. Inclusive growth has led to a
positive performance of the country in terms of shared
prosperity - measured by the income and consumption growth
of the bottom 40 percent of the welfare distribution.
Notwithstanding the positive performance observed, the
recent trends suggest sustainability concerns. Alongside the
inclusive economic growth, economic mobility has improved
remarkably in the country as reflected by the growth of the
middle class. Upward economic mobility in Russia appears to
be the result of both increases in average income levels and
changes in the distribution of income. Given the positive
outcomes observed, the question is, to what extent is
Russia’s favorable performance in terms of shared prosperity
sustainable? To this end, this note explores the main
drivers behind the progress to date. The evolutions of the
labor market, on one hand, and the incidence of the fiscal
system, on the other, appear as the two main factors driving
the observed poverty reduction, increase in the income of
the bottom 40, and growth of the middle class in Russia. The
note is structured as follows: section one gives
introduction. Section two presents an analysis of labor
income, including an overview of market dynamics and the
reduction of wage inequality in the country. Section three
presents a summary of the lessons derived from the analysis
that can inform policy dialogue and contribute to ensuring
the sustainability of the progress achieved in shared
prosperity going forward. |
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