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Inequality and Volatility Moderation in Russia: Evidence from Micro-Level Panel Data on Consumption and Income

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Author Info
Yuriy Gorodnichenko
Klara Sabirianova Peter
Dmitriy Stolyarov

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Abstract

We construct key household and individual economic variables using a panel micro data set from the Russia Longitudinal Monitoring Survey (RLMS) for 1994-2005. We analyze cross-sectional income and consumption inequality and find that inequality decreased during the 2000-2005 economic recovery. The decrease appears to be driven by falling volatility of transitory income shocks. The response of consumption to permanent and transitory income shocks becomes weaker later in the sample, consistent with greater self-insurance against permanent shocks and greater smoothing of transitory shocks. Comparisons of RLMS data with official macroeconomic statistics reveal that national accounts may underestimate the extent of unofficial economic activity, and that the official consumer price index may overstate inflation and be prone to quality bias.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15080.

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Date of creation: Jun 2009
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Handle: RePEc:nbr:nberwo:15080

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Find related papers by JEL classification:
E20 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Duncan, Denvil & Sabirianova Peter, Klara, 2009. "Does Labor Supply Respond to a Flat Tax? Evidence from the Russian Tax Reform," IZA Discussion Papers 4257, Institute for the Study of Labor (IZA). [Downloadable!]
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