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Consumption Smoothing and Vulnerability in Russia

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  • Christopher Gerry
  • Carmen A Li

Abstract

Applying bootstrapped quantile regression to the Russian Longitudinal Monitoring Survey (RLMS) data, we examine the channels through which individuals experience and seek to cope with changes in consumption. We find that married individuals living in small households, with educated heads in urban areas are better equipped to smooth consumption. Investigating the impact of idiosyncratic shocks, we find that the labour market is an important transmission mechanism allowing households to smooth their consumption but also exposing them to risk, mainly through job loss. Outside of pension payments the formal social safety net does not facilitate consumption smoothing, thus heightening the importance of informal coping institutions. It transpires that both support from relatives/friends and home production act as important insurance mechanisms for the most vulnerable.

Suggested Citation

  • Christopher Gerry & Carmen A Li, 2007. "Consumption Smoothing and Vulnerability in Russia," William Davidson Institute Working Papers Series wp885, William Davidson Institute at the University of Michigan.
    • Handle: RePEc:wdi:papers:2007-885
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    References listed on IDEAS

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    1. Hoddinott, John & Quisumbing, Agnes, 2003. "Methods for microeconometric risk and vulnerability assessments," Social Protection Discussion Papers and Notes 29138, The World Bank.
    2. Seeth, Harm Tho & Chachnov, Sergei & Surinov, Alexander & Von Braun, Joachim, 1998. "Russian poverty: Muddling through economic transition with garden plots," World Development, Elsevier, vol. 26(9), pages 1611-1624, September.
    3. Ethan Ligon & Laura Schechter, 2003. "Measuring Vulnerability," Economic Journal, Royal Economic Society, vol. 113(486), pages 95-102, March.
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    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.
    6. Celidoni, Martina, 2011. "Vulnerability to poverty: An empirical comparison of alternative measures," MPRA Paper 33002, University Library of Munich, Germany.
    7. Kumo, Kazuhiro, 2015. "Research on Poverty in Transition Economies: A Meta-analysis on Changes in the Determinants of Poverty," RRC Working Paper Series 51, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    8. Anton Nivorozhkin & Ludmila Nivorozhkina & Kamila Abazieva, 2013. "Expenditures and Income Adequacy at Retirement," Economics Bulletin, AccessEcon, vol. 33(3), pages 2017-2023.
    9. Tomoki Fujii, 2016. "Concepts and measurement of vulnerability to poverty and other issues: a review of literature," Chapters, in: Jacques Silber & Guanghua Wan (ed.), The Asian ‘Poverty Miracle’, chapter 3, pages 53-83, Edward Elgar Publishing.
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    12. Hilaire Gbodja Houeninvo & Venant Cossi Celestin Quenum & Melain Modeste Senou, 2023. "Out- Of- Pocket health expenditure and household consumption patterns in Benin: Is there a crowding out effect?," Health Economics Review, Springer, vol. 13(1), pages 1-20, December.
    13. Nivorozhkina, Ludmila & Nivorozhkin, Anton & Abazieva, Kamilla, 2010. "Drop in consumption associated with retirement. The regression discontinuity design approach," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 19(3), pages 112-126.
    14. Nguyen, Thanh-Tung & Nguyen, Trung Thanh & Grote, Ulrike, 2020. "Multiple shocks and households' choice of coping strategies in rural Cambodia," Ecological Economics, Elsevier, vol. 167(C).
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    18. Boris O. K. Lokonon, 2022. "Multiple shocks and households’ choice of coping strategies in Benin: The relative importance of climate shocks," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 949-964, October.
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    20. Azeem, Muhammad Masood & Mugera, Amin W. & Schilizzi, Steven, 2016. "Poverty and vulnerability in the Punjab, Pakistan: A multilevel analysis," Journal of Asian Economics, Elsevier, vol. 44(C), pages 57-72.
    21. Larysa Krasnikova & Olena Osinkina & Tamara Podvysotskaya & Yuriy Podvysotskiy, 2012. "Social Aspects of Crisis Effects on Households: The Case of Ukraine," wiiw Balkan Observatory Working Papers 103, The Vienna Institute for International Economic Studies, wiiw.
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    23. Balli Faruk & Pierucci Eleonora, 2020. "Risk Sharing and Institutional Quality: Evidence from OECD and Emerging Economies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 67(1), pages 53-71, February.

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    More about this item

    Keywords

    Russia; economics; vulnerability; consumption smoothing; quantile regression;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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