Slobodenyuk E.D. Factors of relative and absolute poverty. In: Model of income stratification of Russian society: dynamics, factors, cross-country comparisons ...

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Abstract

This chapter examines the distinctive characteristics of poverty identified using different measurement approaches. It compares individuals with incomes below one subsistence minimum and those with incomes below 50% of the median equivalised per capita income. The analysis combines econometric methods (logistic regression) to identify the determinants of poverty under each approach with descriptive statistics to profile the corresponding population groups. The relative poverty threshold (50% of the median equivalised per capita income) identifies a substantially smaller share of the poor (6% of the population) than the absolute poverty measure based on the subsistence minimum (25% of the population). At the same time, the characteristics traditionally associated with poverty in Russia are more pronounced among the relatively poor than among those identified using the absolute poverty threshold. Individuals classified as relatively poor are more likely to be employed in jobs that provide weaker protection of labour rights. As a consequence of their disadvantaged position in the labour market, they are more likely to lose their jobs during periods of economic recession. Even when they remain employed, they more frequently experience unpaid leave, wage cuts, delayed wage payments, and other violations of labour rights. This pattern appears to be partly explained by the concentration of the relatively poor in rural areas, where labour markets are typically narrow and offer limited employment opportunities. The analysis leads to the conclusion that a relative poverty threshold set at 50% of the median equivalised per capita income should not be interpreted as a conventional poverty line but rather as a threshold of deep poverty. At the same time, poverty in Russia extends well beyond this group, indicating that deprivation is considerably more widespread than such a threshold suggests.