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The Role of the Safety Net and the Labor Market on Falling Cash Consumption in Russia: 1994–96 A Quintile‐Based Decomposition Analysis

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  • Jeni Klugman
  • Alexandre Kolev

Abstract

This paper investigates the relative importance of changes in social safety net support and labor market in explaining the decline in the purchasing power of Russian households that occurred during the period 1994–96. Drawing on three cross‐sections of the Russian Longitudinal Monitoring Survey, we find that labor market changes have been the main cause of the observed decline in cash consumption. Among these changes, reductions in the impact of the time spent in employment and increasing frequency of wage arrears are most important, more so than increases in open unemployment or the fall in real wages among workers who were fully paid. The contribution of falling state transfers to cash consumption is nonetheless substantial. We also find that the sources of the decline in household welfare vary substantially across quintiles in the distribution.

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  • Jeni Klugman & Alexandre Kolev, 2001. "The Role of the Safety Net and the Labor Market on Falling Cash Consumption in Russia: 1994–96 A Quintile‐Based Decomposition Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(1), pages 105-124, March.
    • Handle: RePEc:bla:revinw:v:47:y:2001:i:1:p:105-124
    DOI: 10.1111/1475-4991.00006
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    Cited by:

    1. Tilman Brück1 & Alexander Danzer & Alexander Muravyev & Natalia Weißhaar, 2007. "Determinants Of Poverty During Transition: Household Survey Evidence From Ukraine," PRUS Working Papers 40, Poverty Research Unit at Sussex, University of Sussex.
    2. Brück, Tilman & Danzer, Alexander M. & Muravyev, Alexander & Weisshaar, Natalia, 2010. "Poverty during transition: Household survey evidence from Ukraine," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 123-145, June.
    3. Daniela-Emanuela Danacica, 2018. "Labor Market Insertion Of Higher Educated People – A Literature Review," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 138-145, December.
    4. Boyarchuk, Dmytro & Maliar, Lilia & Maliar, Serguei, 2005. "The consumption and welfare implications of wage arrears in transition economies," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 540-564, September.
    5. Kseniya Abanokova & Hai-Anh H. Dang, 2023. "Poverty in Russia: a bird’s-eye view of trends and dynamics in the past quarter of a century," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 58, pages 627-635, Edward Elgar Publishing.

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