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For example, findings obtained in 1996 fromsurveying 30 thousand urban households demonstrated that for the highest 20percent income group of the total number of households the dependency rate was0.86 – i.e. there was86 dependents per 100 households. This ratio was 1.96 for the poorest quintileof households (196 dependents per 100 households). The number of children andtheir share in the household size influences the volume of per capita income.The share of children per one household (relevant to 20 percent of householdswith the lowest income) amounted to 37.3 percent, and for richest households– 19.9 percent.Findings of household budget survey demonstrate that the number of non-workingpensioners in the families with different income level fluctuates: there are 31such persons per 100 households in low-income families, and in highest income– 19 such persons.Thus, a relatively low-income level in many cases is connected with the need tosupport children, aged members of the family, single parent families (singlemother family), as well as families where the main breadwinner is a pensioner,student or unemployed.

Large size income households have at theirdisposal bigger in kind earnings than high-income households do. This isespecially true in case of children benefits. On the whole, households with lowper capita income have considerably larger in kind additional earnings thanhouseholds with high per capita income do.

Results of household budget survey carriedout in 1997-1999 using a single methodology demonstrate conservation, despite adrop in purchasing power of the population resulting from 1998 financialcrisis, of relatively stable numeric parameters of social differentiationbetween households.

Table 3.1

INDICES OF SOCIAL INEQUALITY IN RUSSIA IN 1997-1999

FundsIndex (ratio of disposable per capita resources of the least and mostprosperous groups of population, times)

Gini Index(Index of concentration of resources)

Ratiobetween median per capita value of resources and their average value (in%)

1997

1998

1999

1997

1998.

1999

1997

1998

1999

Disposableresources

10,7

9,9

9,9

0,366

0,353

0,352

72,7

72,8

73,2

Grossearnings

10,8

9,6

9,8

0,362

0,347

0,348

74,5

73,8

74,3

Data provided in the table proves that by1997 main income groups have already been established in Russia, and the 1998crisis did not seriously influence this process. During 1997-1999 incomeinequality was slightly reduced. However, differences in expenditure onfoodstuffs have increased.

Table 3.2

RATIO OF EXPENDITURE ON FOODSTUFFS OF 10 PERCENT MOST AND 10PERCENT LEAST PROSPEROUS GROUPS OF POPULATION IN RUSSIA

IN 1997-1999, Fold

1997

1998

1999

Vegetables, melonsand gourds

5,2

6,8

7,0

Fruit andberries

7,7

10,4

13,1

Meat

5,1

7,6

9,0

Fish

6,1

7,6

8,3

Meals outsidehome

19,5

26,7

34,9

Increased differentiation in consumptionbetween the richest and poorest groups of society demonstrates that as a resultof drastic changes in economic situation which occurred in August 1998, societyhas become much more differentiated from the consumption point of view,although there was no increase in income stratification.

Poverty factors in Russia are thefollowing:

  • Location of households (spread of poverty is higher in ruralareas);
  • High rate of children (birth of another child sharply increaseschances for a household to slide into a poverty group);
  • Reaching pension age;
  • Unemployment, including hidden unemployment (wage arrears, wagebackpay, forced holidays on employers’ initiative without paying wages,etc.)
  • Level of education.

Wage and salary distribution in the economyis one of the main factors of per capita money income differentiation of thepopulation, which is explained by their high share in the volume of earnings.Wages fund and distribution of its resources among different categories ofpersonnel as well as distribution of profit are main factors, which influencepersonnel inequality.

This trend is strengthened by a reductionin the volume of state social programs. Transfer of costs on health care,education and housing into wage and salary scheme means not only an increase inhousehold consumption independence, but a restriction in satisfaction of needsdue to a reduction in possibilities of proper budgets.

Table 3.3


PER CAPITA INCOME INEQUALITY AND WAGE LEVELDIFFERENTIATION OF HOUSEHOLDS

IN 1996

(in percent)


All households

Quintile (20 percent) groups of households


First with low income (wage)

second

third

fourth

Fifth with high income (wage)

Counting on a member of ahousehold:







Income

100

6,6

11,7

16,2

22,7

42,9

Wage, including business income


100


3,4


9,3


16,0


24,0


47,7

Gini Index for income

0,360

0,177

0,060

0,052

0,062

0,199

Gini Index for wages

0,463

0,668

0,124

0,070

0,070

0,204

In order to assess labor remuneration of awage earner, one can use the cost and structure of inputs allocated on laborforce on average per one worker monthly, which represents a total amount ofinputs of an enterprise (employer) allocated on workforce and itsstructure.

Table 3.4

STRUCTURE OF LABOR COSTS INCURRED BY AN ENTERPRISE IN RUSSIAIN 1998

(results obtained from surveying 25 thousandorganizations)


Laborcosts

Rubles on average per month

Of which, in %



Wages

Costs on housing for employees

Expenses on social protection

Expenses on skills training

Expenses oncultural and welfare facilities

Other costs

Taxes

Industry

2114,

59,8

3,1

30,4

0,3

2,4

2,9

1,1

Transportation

2297,0

64,8

1,2

28,8

0,4

0,9

3,1

0,8

Communication

2164,1

67,0

0,5

58,3

0,3

0,7

1,6

1,6

Construction

2260,0

63,1

0,8

30,8

0,1

0,4

3,2

1,6

Wholesale and retailcommerce

1583,1

67,6

0,4

28,6

0,2

0,3

1,9

1,0

Catering

1072,3

69,1

0,1

27,8

-

0,1

1,8

1,1

Housing and utilityservices, consumer services

1737,2

66,5

0,5

29,7

0,1

0,2

1,1

1,1

Finance, credit,
insurance and provision of pensions

2923,5

66,4

0,3

29,3

0,7

0,3

1,8

1,2

Total across pilotbranches of economy

2094,4

62,5

2,0

29,8

0,3

1,5

2,7

1,2

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