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00014 University of Helsinki

Past Aleksanteri Conferences

Svetlana Mareeva (National Research University Higher School of Economics, Moscow, Russia)

Income Stratification in Russia: Approaches and Results

Income stratification seems to be one of the most straightforward approaches to analysing the structure of a society; however, developing a model for income stratification is not a trivial methodological exercise. The methods used to define groups based on their positions in the income distribution can be summed up in two broad approaches – absolute and relative. Most of these approaches (and the resulting income thresholds) are only to a certain extent applicable to Russia, as they have been developed for different purposes and countries at different stages of social and economic development. Given the variety of methods in use, this paper defines the most efficient approaches to income stratification in contemporary Russia based on empirical data of 2014-2016, proceeding to analysis of living standards and quality of life of different income groups. Empirical analysis shows that most widely used thresholds of the absolute approach that were relevant for Russia in the beginning of the 2000s cannot be efficiently applied to contemporary Russian society, which has undergone fundamental changes over the last 15 years regarding income. The relative approach, based on the median income as the social standard of living, can be efficiently applied to Russian conditions. The application of the relative approach proposed by the shows that the income stratification model in Russia has been quite stable even under the influence of the economic crisis during the last two years (2014–2016). Middle-income groups dominate; however, the lower-middle groups outnumber the upper-middle group, and their living standards are quite modest. About a third of the Russian population are poor or at risk of poverty, while high-income groups made up around 10%. Extreme poverty is not typical for Russia, and the income of most Russians is close to the median income of the country as a whole.