Poverty and Economic Growth in Russia’s Regions

Paul Mosley () and Altay Mussurov
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Paul Mosley: Department of Economics, The University of Sheffield

No 2009006, Working Papers from The University of Sheffield, Department of Economics

Abstract: The extent of poverty reduction has varied enormously during the recovery period across the eighty-three regions of Russia, with some regions continuing to experience increases in poverty even though they have returned to growth. We attempt to understand and analyse the reasons for this regional variation. We focus on two principal causative factors: the changes in economic structure resulting from the liberalisation of the economy, and policy instruments aimed at poverty reduction. We find that many regions which experienced structural change under perestroika (notably those benefiting from the current oil and gas boom) experienced massive growth in GDP but little poverty reduction, because their prevailing production function is capital-intensive and thus they were unable to transmit much or any reduction in poverty through the labour market. Regions where the growth of the early 2000s was diversified, was based more on the service sector, and where the educational system made possible flexibility within the labour market, tended to be more effective at generating poverty reduction.

Keywords: Russia; poverty; regional analysis (search for similar items in EconPapers)
JEL-codes: I32 P26 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-04, Revised 2009-04
New Economics Papers: this item is included in nep-cis, nep-fdg, nep-ltv and nep-tra
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