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­­­Economic Research on Poverty

Priority areas of development: economics
2012
The project has been carried out as part of the HSE Program of Fundamental Studies.

Project Head: M.Lokshin

Department/Institute: The Centre for Labour Market Studies

This project was implemented within the framework of the HSE's Basic Research Programme.

The poverty study focuses on the analysis of two main areas. The first involves changes in household composition and consumption patterns from 1994 to 2010. This study of family structure in Russia was brought about by an interest in the significant changes that have occured in Russian households over the past two decades. More recent studies have shown that households adjust their size and structure in response to economic shocks, implying that changes in household structure can be an important mechanism of mitigating risks and smoothing out the negative effects of economic shocks. The second area analysed is the impact of labor migration in the CIS region. This area of research has attracted tremendous interest, and literature on the topic grows annually. But, migration processes in the CIS are still understudied; there exists surprisingly little economic analysis of migration in Russia which is one of the world's top migrant-receiving countries.

1. Research Object: Russian households; migrants from Tajikistan in the Russian labour market.

2. Research Purpose: The purpose of this report is twofold. In the first part of our report, we analyse the household as a dynamic unit rather than a static one, moving from stage to stage over the life of its members. Using RLMS data as a basis, we try to provide a comprehensive picture of the evolution of Russian households with a particular focus on the relationship between structural changes and household wealth. The second part of our research project is aimed at creating a valid, reliable portrait of the migrant in Russia. We also calculate wage differentials between natives and migrants, the gap being dependent upon the observable characteristics of the individuals involved.

3. Empirical Base of the Research: Data from a panel study of households is used to investigate the extent of the difference between cross-sectional and longitudinal estimates of the incidence of different forms of households (nationally representative household survey RLMS). We use data for the 1994-2010 period and our panel includes 14 waves during the period of 1994-2009, with the exception of 1997 and 1999. Consumption data on both durables and nondurables are available from 1992. The data we are using to analyse labor migration comes from 2007 and 2009 rounds of the Tajik Living Standards Survey (TLSS). This survey is based on a representative sample of Tajik households. It is a unique source of information on different aspects of life in the country including migration. To a great extent, it is free from problems of bias towards registered migrants as happens in surveys performed in the receiving country. To calculate wage differentials with Russian workers, we combine the TLSS with the corresponding round of RLMS.

4. Research results: Our major findings about the evolution of household structure are that the proportion of single-adult households increased by 19% over the 1994-2010 period. During that same period, the portion of extended households having no children under 18 increased, showing a significant rise to 48% by 2010. The main source of the changes was the increasing number of multigenerational households which increased over the fifteen years by 36%. Households of couples with young children experienced a substantial decline. All family structures predominantly changed into households doubled in size. Longitudinal results show that the proportion of parent households sharing their dwelling with extra adults rapidly increased in 1998 and 2006. Moreover, we also find that extended households were more disadvantaged than other household types during 1998.

As for the migration project, we describe a typical migrant as a 30-year-old male from a rural area, who has received a general secondary education and is a member of a large household. The migrants are “intermediately” selected into migration as differences in the distribution of education among migrants and non-migrants show. We find a 36% wage gap between migrants and natives in 2007 and a 45% gap in 2009. This gap is conditional on observable characteristics among which age is most important. Among those factors unaccounted for, the most influential are hours worked and the choice of a comparable group among Russian workers (informality).

5. Implementation of the Research Results: Although the first part of our report is primarily descriptive, this type of analysis has particular advantages for policy analysis, most notably in designing welfare programs that take into account the complex mechanism of changes in family structure in response to economic factors. The way household structure and composition evolve through their saving and consumption pattern is important for forward planning in policy areas that include elder care, child care, and housing.

The migrant-native wage differential calculated in our project is an indicator of interest for policymakers. First, it makes it possible to calculate the benefits of a foreign labor force for employers. Second, depending on the nature of the gap, different policies are applicable. If the disparity is driven by demand-side factors (price discrimination), lower boundaries for migrant wages might be applied. If supply-side factors are a concern (the lack of human capital), policy makers should create programs for the acquisition of country-specific skills.

6. International Partners: The World Bank


 

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