Economic Growth and its Effect on Poverty Reduction in Russia

Yuka Takeda

July 2009


This study discusses whether Russia's economic growth following the 1998 financial crisis is pro-poor. Using Russia's regional data pertaining to 1995-2002, we estimate the elasticity of poverty to real per capita GRP (gross regional product). The analysis reveals that the elasticity of poverty to growth after the crisis substantially falls at both the national and regional levels. Our results also suggest that inequality increases between and within the richer and poorer regions. We conclude that it is quite necessary to formulate pro-poor policies rather than growth-enhancing ones, in order to alleviate poverty in Russia.

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