Regional aspects of smoothing of the living standard differences among the population of Russia (49)

Theme Track: Regional Competitiveness - Regional Disparities

Authors:
Reshetnikova, Helen ; Dozorova, Helen

Social stratification - an inalienable feature of market transformations - takes place on two levels in Russia, i.e. among and inside the regions. The division into 'rich' and 'poor' has certain specific features in each region. At the same time this phenomenon is influenced by the rates and forms of the inflation process going in the whole economic system. The basic element of social differentiation is the stratification of incomes of the population, which is a result of combined interaction of economic, demographic, social and geographic factors. The inequality in terms of income distribution is shown by the Gini coefficient, which generally grew in a decade from 0,256 in 1991 to 0,400 in 2000 (the maximum value of 0,409 was observed in 1994). The value of the Gini coefficient was the biggest (0,53) in the Magadan Oblast and the smallest (0,20) in the Buriat Autonomous Okrug. Basing oneself on the 'Kuznets Law', one could assume that the values of the above indicator in the social sphere today should tend to become more even by the regions and social groups and reduce. However, judging by the real situation, the trends are just the opposite, which is an indirect manifestation of poor competition on the consumer market and points at weak effects of the social public policy. Since money wages dominate in the aggregate incomes of the population, the income stratification is close to that of the money wages and much depends on the latter. Wage differences by sectors of the economy is considerable in Russia, therefore the structure of the regional economy determines the rate of social differentiation. For instance, the average wage in the gas industry in May 2001 was almost 10 times that in the light industry. It should be noted that the rate of the average per head money income differentiation by subjects of the Russian Federation tends to increase, having risen from 12 in late 1999 to 16,7 times in 2000 and then to 16,9 times in 2001. So, one can admit that the values diverge or, in other words, the differences grow along with the differences in respect of the average per head retail turnover and effective demand of the population.

It is clear that the regional policies have to change this negative trend. Income differences give rise to that in the consumption of goods and services by the population. For instance, in 2000, when the average rate of consumption of meat products in Russia was 49.6 kg, the respective figures for Moscow, St. Petersburg, the Saratov and Astrakhan Oblasts made 81.4, 68.5, 52.5 and 23.8 kg. Consumption rates inside the regions themselves differ in both social (decile groups) and territorial (urban or rural) contexts. Thus, in the rural areas of Saratov Oblast, where incomes are relatively small, the differences in terms of consumer expenses and basic food consumption are greater than in the city.

All this proves it necessary to regulate the income and consumption differences by improving the income and tax policies and extending efficient social support. An important point in the regulation is the making of forecasts breaking the population down by income rates with the use of the SB Johnson curve.

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