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Regular version of the site

Economic Studies of Poverty

2011
The project has been carried out as part of the HSE Program of Fundamental Studies.

The study of poverty contained in the first part of the report is focused on analysis of two main areas. The first is the strategies that enable households to cope with negative economic shocks. The second is the effect of migration on individual welfare and on the situation in the labor market in donor and recipient countries.

In the first area we examine the effect of economic shocks on Russian household welfare. During the past two decades Russia has experienced a series of sweeping economic shocks. The situation has remained volatile for a long time and these repeated shocks have had a negative effect not only on individuals but also on the wellbeing of households. Russian families have had to adjust their behaviour to smooth out the impacts of these shocks.

The focus of the study is to analyze the coping strategies families have developed related to alterations in the household structure. We explore the possibility that economic shocks lead to adjustment in household structure by focusing on poor households in Russia. In this context the object of this research is Russian households facing the risk of a reduced income.

At the first stage we compare the effect of poverty in different types of households. Our analysis is based on data from a nationally representative survey - the Russian Longitudinal Monitoring survey of HSE (RLMS-HSE). To date the RLMS-HSE contains 19 rounds of data in two phases. This study focuses on rounds preceding, during and after the economic shocks (particularly of 1998 and 2008). According to the results of research we can expect that households which endured economic shocks are likely have experienced a significant increase in household size and to have become more complex (with additional generations). Futher we try to identify households that have lost most in the crisis and we also evaluate whether government social support strategies help to protect households. The effectiveness of economic policies that target the poor might be improved if they incorporate in their design the private responses of poor households to economic shocks.

The second part of the report is on the project of international labor migration analysis and its influence on inequality and poverty. The object of interest here are the decision-making units – the households deciding to allocate a part of their labor resources to international migration. The migrants themselves and their position in the labor market of the receiving country is also an object of interest.

The second part of the report solves two problems. The first is creating a portrait of a typical migrant in Russia using data from a Tajikistan Living Standards Survey – a unique source of information about Tajik households. There are two aims in solving this problem. First, this is a starting point for solving of selection into migration problem and helps us to formulate some hypothesis about the selection process. The second aim is to fight some common stereotypes about migrants.

The results of this part of the work include an extensive description of a typical migrant-sending household in comparison with non-sending, typical migrant in comparison with a non-migrant, and a description of this representative migrant’s experience in the receiving country. This makes it  possible to hypothesize about positive selection in the low-skilled group.

The second aim is a comparison of a migrant's and a native's earnings in the receiving country – Russia. The aim of solving this problem is that finding a wage gap between migrants and locals allows for hypothesizing about the impact that migrants have on the receiving country’s labor market – a question that has not received much attention.

As a result of this part we found a wage gap of 8,834 rubles between migrants and locals. That is, migrants receive 40% less income than locals with the same qualifications. We formulated a list of hypotheses of the reasons for such gap. The hypotheses need further research to be tested. This is an important question as such a gap can exist in conditions where migrants do not influence the wages of the local population but which could lead to a negative effect on them.