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Poverty correlates and indicator-based targeting in Eastern Europe and the Former Soviet Union

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  • Grootaert, Christiaan
  • Braithwaite, Jeanine

Abstract

The authors compare poverty in three Eastern European countries (Bulgaria, Hungary, and Poland) with poverty in three countries of the former Soviet Union (Estonia, Kyrgyz Republic, and Russia). They find striking differences between the post-Soviet and Eastern European experiences with poverty and targeting. Among patterns detected: a)Poverty in Eastern Europe is significantly lower than in former Soviet Union countries. b) Rural poverty is greater than urban poverty. c) In Eastern Europe there is a strong correlation between poverty incidence and the number of children in a household; in the former Soviet Union countries this is less pronounced, except in Russia. d) There is a gender and age dimension to poverty in some countries. In single-person households, especially of elder women, the poverty rate is very high (except in Poland) and poverty is more severe. The same is true in pensioner households (except in Poland). In Poland the pension system has adequate reach. e) Poverty rates are highest among people who have lost their connection with the labor market and live on social transfers (other than pensions) or other nonearned income. But through sheer mass, the largest group of poor people is the working poor -- especially workers with little education (primary education or less) or outdated vocational or technical education. Only those with special skills or university education escape poverty in great numbers, thanks to the demand for their skills from the newly emerging private sector. f) The poverty gap is remarkably uniform in Eastern European countries, especially Hungary and Poland, suggesting that social safety nets have prevented the emergence of deep pockets of poverty. This is much less true in the former Soviet Union, where those with the highest poverty rate also have the largest poverty gap. In the short to medium term, creating employment in the informal sector will generate a larger payoff than creating jobs in the formal (still to be privatized) sectors, so programs to help (prospective) entrepreneurs should take center stage in poverty alleviation programs.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1942.

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Date of creation: 31 Jul 1998
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Handle: RePEc:wbk:wbrwps:1942

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Related research

Keywords: Public Health Promotion; Services&Transfers to Poor; Poverty ReductionStrategies; Environmental Economics&Policies; Health Monitoring&Evaluation; Poverty Assessment; Environmental Economics&Policies; Safety Nets and Transfers; Rural Poverty Reduction; Services&Transfers to Poor;

References

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  1. Simon Commander & Andrei Tolstopiatenko & Ruslan Yemtsov, 1999. "Channels of redistribution: Inequality and poverty in the Russian transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(2), pages 411-447, July.
  2. Chase, R.S., 1995. "Women's Labor Force Participation During and After Communism: A Case Study of the Czech Republic and Slovakia," Papers 768, Yale - Economic Growth Center.
  3. Evgeny Gavrilenkov & Vincent Koen, 1994. "How Large Was the the Output Collapse in Russia? Alternative Estimates and Welfare Implications," IMF Working Papers 94/154, International Monetary Fund.
  4. Alderman, Harold & Garcia, Marito, 1993. "Poverty, household food security, and nutrition in rural Pakistan:," Research reports 96, International Food Policy Research Institute (IFPRI).
  5. Kaufmann, Daniel & Kaliberda, Aleksander, 1996. "Integrating the unofficial economy into the dynamics of post-socialist economies : a framework of analysis and evidence," Policy Research Working Paper Series 1691, The World Bank.
  6. Klugman, Jeni & Braithwaite, Jeanine, 1998. "Poverty in Russia during the Transition: An Overview," World Bank Research Observer, World Bank Group, vol. 13(1), pages 37-58, February.
  7. Glewwe, P., 1990. "Investigating The Determinants Of Household Welfare In Cote D'Ivoire," Papers 71, World Bank - Living Standards Measurement.
  8. Grootaert, Christiaan, 1995. "Poverty and social transfers in Poland," Policy Research Working Paper Series 1440, The World Bank.
  9. Glewwe, P. & Hall, G., 1995. "Who is Most Vulnerable to Macroeconomic Shocks? Hypotheses Tests Using Panel Data from Peru," Papers 117, World Bank - Living Standards Measurement.
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Cited by:
  1. Zeller, Manfred & Sharma, Manohar & Henry, Carla & Lapenu, Cecile, 2006. "An operational method for assessing the poverty outreach performance of development policies and projects: Results of case studies in Africa, Asia, and Latin America," World Development, Elsevier, vol. 34(3), pages 446-464, March.
  2. Houssou, Nazaire & Zeller, Manfred, 0. "Targeting the Poor and Smallholder Farmers Empirical Evidence from Malawi," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 49.
  3. Richard Pomfret & Kathryn H. Anderson, 1999. "Living Standards During Transition to a Market Economy: The Kyrgyz Republic in 1993 and 1996," School of Economics Working Papers 1999-03, University of Adelaide, School of Economics.
  4. Gasparini, Leonardo & Alejo, Javier & Haimovich, Francisco & Olivieri, Sergio & Tornarolli, Leopoldo, 2007. "Poverty among the Elderly in Latin America and the Caribbean," MPRA Paper 42957, University Library of Munich, Germany.
  5. Houssou, Nazaire & Zeller, Manfred & Alcaraz V., Gabriela & Schwarze, Stefan & Johannsen, Julia, 2007. "Proxy Means Tests for Targeting the Poorest Households -- Applications to Uganda," 106th Seminar, October 25-27, 2007, Montpellier, France 7946, European Association of Agricultural Economists.
  6. L. Cuna, 2004. "Assessing Household Vulnerability to Employment Shocks: A Simulation Methodology Applied to Bosnia and Herzegovina," Working Papers 528, Dipartimento Scienze Economiche, Universita' di Bologna.
  7. Alexandre BERTIN (GREThA) & Matthieu CLEMENT (GREThA), 2007. "Poverty and shortage economy: a reappraisal with the capability approach (In French)," Cahiers du GREThA 2007-16, Groupe de Recherche en Economie Théorique et Appliquée.
  8. Zeller, Manfred & Houssou, Nazaire & Alcaraz V., Gabriela & Schwarze, Stefan & Johannsen, Julia, 2006. "Developing Poverty Assessment Tools Based on Principal Component Analysis: Results from Bangladesh, Kazakhstan, Uganda, and Peru," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25396, International Association of Agricultural Economists.

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