Welfare Impacts of the 1998 Financial Crisis in Russia and the Response of the Public Safety Net

Lokshin, Michael; Ravallion, Martin

doi:10.1111/1468-0351.00045

Cited by 99 publications

(72 citation statements)

References 11 publications

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“…In order to evaluate poverty one needs to define a financial satisfaction level below which an individual is considered poor. Besides the financial satisfaction question, there are also other subjective questions that have been used to evaluate the incidence of poverty, notably the Income Evaluation Question (Goedhart et al 1977) and the Economic Ladder Question (Ravallion and Lokshin 1999;Lokshin and Ravallion 2000).…”

Section: Valuation Studies and Welfare Analysismentioning

confidence: 99%

Happiness economics

Ferrer-i-Carbonell

2012

SERIEs

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There is enough evidence to be confident that individuals are able and willing to provide a meaningful answer when asked to value on a finite scale their satisfaction with their own lives, a question that psychologists have long and often posed to respondents of large questionnaires. Without taking its limitations and criticisms too lightly, some economists have been using this measure of self-reported satisfaction as a proxy for utility so as to contribute to a better understanding of individuals' tastes and hopefully behavior. By means of satisfaction questions we can elicit information on individual likes and dislikes over a large set of relevant issues, such as income, working status and job amenities, the risk of becoming unemployed, inflation, and health status. This information can be used to evaluate existing ideas from a new perspective, understand individual behavior, evaluate and design public policies, study poverty and inequality, and develop a preference based valuation method. In this article I first critically assess the pros and cons of using satisfaction variables, and then discuss its main applications.

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Section: Valuation Studies and Welfare Analysismentioning

confidence: 99%

Happiness economics

Ferrer-i-Carbonell

2012

SERIEs

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“…Lokshin and Ravallion (2000), examining the welfare effects of the 1998 financial crisis, find that it was not felt only by those poor prior to 1998 but impacted upon individuals across the income distribution. Analysing the effects of changes in the distribution of social welfare spending they find that social policy was "on balance, poverty reducing".…”

Section: [Table 1 Here]mentioning

confidence: 99%

“…Ligon and Schechter (2003) measure vulnerability as the difference between the utility associated with some certainty-equivalent consumption and the expected utility defined according to realized consumption. c) Vulnerability as uninsured exposure to risk provides an alternative ex post assessment of welfare loss arising from the onset of an economic shock (Glewwe and Hall (1998), Maloney et al (2004) and Lokshin and Ravallion (2000) all offer analysis using this approach). In this paper we utilise the latter empirical category centring on the observed effects of uninsured risk exposure or the inability to effectively manage risk when subjected to shocks.…”

Section: The Concept Of Vulnerability and The Theoretical Frameworkmentioning

confidence: 99%

Consumption smoothing and vulnerability in Russia

Gerry

2010

Applied Economics

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Applying bootstrapped quantile regression to the Russian Longitudinal MonitoringSurvey (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. In contrast with previous findings, it would seem that regardless of its historical, political and social roots, the garden plots and dachas, often romanticized in Russian literature do provide a means by which urban Russians are able to cope with economic fluctuations. We finish by stressing the important policy lessons for Russia's developing market economy.

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“…Milanovic (2000) looked at social protection transfers in Latvia and found a weak pro-poor role of social protection benefits. Lokshin and Ravallion (2000) analyzed the role of the social safety net in protecting the poor from the 1998 Russian financial crisis and concluded that the social safety net in place was largely insufficient to protect the poor from the Russian crisis. Ravallion et al (1995) looked at the early years of the transition in Hungary and found that the safety net was able to protect effectively from poverty but did not play an important role in lifting people out of poverty.…”

Section: Some Evidence On Public and Private Transfers In Transitionmentioning

confidence: 99%

The Poverty Reduction Capacity of Private and Public Transfers in Transition

Verme

2010

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe transitional economies of the Former Soviet Union (FSU) have enjoyed an extraordinary period of growth and poverty reduction between 2000 and 2007 and this occurred in concomitance with significant increases in private and public transfers to households. The paper assesses the relative importance of these transfers for welfare and poverty in Moldova, the poorest country in Europe. A longitudinal analysis based on panel data reveals that private transfers and social insurance transfers are effective in improving welfare and reducing poverty whereas social assistance transfers have little or no effect. Social insurance and social assistance seem to have swapped roles. Social insurance is most relevant for lifting people out of poverty while social assistance -if anything -has a small role in protecting the non-poor from falling into poverty. We also find that the different types of transfers do not crowd-out each other and that social insurance may in fact reinforce the capacity of private transfers to reduce poverty. Such findings have several policy implications for the near future: a) Poor households in FSU transitional economies remain highly vulnerable to shocks in public and private transfers; b) the 2008-2009 recession is likely to expose this vulnerability and result in a surge in poverty larger than expected and c) the social assistance systems remain in great need of pro-poor reforms and cannot currently provide an adequate protection from economic shocks. JEL: H5, I3, O1, P2

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Welfare Impacts of the 1998 Financial Crisis in Russia and the Response of the Public Safety Net

Cited by 99 publications

References 11 publications

Happiness economics

Happiness economics

Consumption smoothing and vulnerability in Russia

The Poverty Reduction Capacity of Private and Public Transfers in Transition

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