Income Inequality in Russia. Measurement Based on Equivalent Income

TL;DR: In this paper, the acceptability of using the equivalence scales used in the EU and OECD in Russia, based on the characteristics of consumption of its population and to obtain the additional consistent to international practice indictors which assess poverty and inequality based on official statistics which are available to users.

Abstract: The relevance of the research, the results of which are presented in this article, is conditioned by the attention in society that is given today to the development of effective policy in the field of poverty eradication and inequality reduction at the global and national levels.The purpose of the article is to analyze the acceptability of using the equivalence scalesused in the EU and OECD in Russia, based on the characteristics of consumption of its population and to obtain the additional consistent to international practice indictors which assess poverty and inequality based on official statistics which are available to users. Equivalent income research on inequality and poverty is a widespread experience international organizations and national agencies abroad. However, in Russia, it has not received proper application. The only example is the estimation of the risk of poverty and social exclusion, by Rosstat which has implemented the Eurostat methodology.The study revealed that the use of the value of the equivalent income as a criteria of households significantly changes the composition of population groups in the social hierarchy. Thus, the poorest strata of the population with the minimum values of the equivalent incomelevels are more likely to include older people and to a lesser extent children compared to the groups of households according to the nominal income per capita. At the same time, the characteristics of income distribution, such as the Gini Index and Palma Ratio, practically do not change their values. Therefore, the inclusion of an equivalent income in the analysis of inequality and poverty makes it possible to identify additional characteristics and socially significant aspects of these phenomena and take them into account accordingly when developing policy measures and targeted support for needy groups of the population.The framework of the calculations that were performed in the study was the files of anonymized microdata available from a sample survey of population income and social programs participation, which were taken from the website of the Federal State Statistics Service.