How to combat poverty and ensure sustainable growth of the middle class: criteria of distribution and policy measures (Part 2)

The traditionally applied approach to determine the boundaries of poverty and the middle class based predominantly on the criteria of income level overlooks a wide group of citizens related to low-income category. The paper examines multicriteria approaches in determining the boundaries of poverty and the middle class which cover social, economic and behavioral factors. As an essential criterion to classify population as a poor class the authors chose behavioral characteristics related to the possibility and propensity for long-term planning. Applied regression analysis confirms the significance of some households’ social and economic characteristics that increase the likelihood of their belonging to a certain population group, such as household size, age of the head of household, education level, professional activity, etc. Based on various methodological approaches, the analysis of the Russian society structure reveals its high polarization where the share of the poor fluctuates from 10% to a quarter of population and even more considering the parameters that determine the quality of life, behavior and self-identification. Drawing on multicriterial approach, the authors propose additional measures of support, which cover not only the poorest segments and large families, but also a significant cohort of low-income citizens, as well as measures that contribute to higher-income work and the increment of human wealth. The analysis concludes with cost assessment of suggested measures and the effect of their implementation on socio-economic development and welfare until 2030.

1. Decree of the President of the Russian Federation No. 597, May 7, 2012 “Measures to implement state social policy”.

2. Decree of the President of the Russian Federation No. 204, May 7, 2018 “National goals and strategic objectives of the Development of the Russian Federation for the period up to 2024”.

3. Meeting of the Council for Strategic Development and National Projects, December 15, 2021. http://kremlin.ru/events/president/news/67366

4. Weber, M. (2001). Historical History. Moscow, City. CANON-press-C, Kuchkovo pole.

5. Weber, M. (1994). Basic concepts of stratification. https://ecsocman.hse.ru/data/254/578/1217/020_veber.pdf

6. Grigoriev, L., Salmina, A., & Kuzina, O. (2009). The Russian middle class: analysis of the structure and financial behavior. Moscow, Ekon-Inform.

7. Izvestiya. Politics. “Russia is focusing — Challenges we must respond to”, January 16, 2012. https://iz.ru/news/511884

8. Kapelyushnikov, R. I. (2019). T. Piketty’s team on inequality in Russia: a collection of statistical artifacts. Moscow, Publishing House of the Higher School of Economics.

9. Концепция долгосрочного социально-экономического развития Российской Федерации на период до 2020 года. Утверждена распоряжением Правительства РФ от 17.11.2008 № 1662-р.

10. Kuzina, O. E., & Moiseeva, D. V. (2021). Strategies of financial behavior of Russians: concept, dynamics, factors. Voprosy Economiky, 10, 71–88.

11. Maleva, T. M., & Ovcharova L. N. (2009). Russian middle classes at various stages of economic development. Moscow, INSOR.

12. Tikhonova, N. E. (2020). The middle class in the focus of economic and sociological approaches: borders and internal structure (on the example of Russia). Mir Rossii, 4. DOI: 10.17323/1811-038X-2020-29-4-34-56

13. Novokmet, F., Piketty, T., & Zucman, G. (2018). From Soviets to oligarchs: inequality and property in Russia 1905–2016. Econ Inequal, 16, 189–223. DOI: 10.1007/s10888-018-9383-0

14. OECD. (2010). The Emerging Middle Class in Developing Countries. https://www.oecd-ilibrary.org/development/the-emerging-middle-class-in-developing-countries_5kmmp8lncrns-en, https://doi.org/10.1787/18151949

15. OECD. (2019). Under Pressure: The Squeezed Middle Class. https://www.oecd-ilibrary.org/sites/49359f57-en/index.html?itemId=/content/component/49359f57-en, https://doi.org/10.1787/689afed1-en

16. Savage, M., Devine, F., Cunningham, N., Taylor, M., Li, Y., Hjellbrekke, J., Le Roux, B., Friedman, S., & Miles, A. (2013). A new model of social class? Findings from the BBC’s Great British Class Survey experiment. Sociology, 47(2), 219–250. https://doi.org/10.1177/0038038513481128

17. World Bank (2018). Piecing Together the Poverty Puzzle. Poverty and Shared Prosperity. DOI: 10.1596/978-1-4648-1330-6

18. World Bank. (2020). Poverty and Shared Prosperity 2020: Reversals of Fortune. Washington, DC: World Bank. DOI: 10.1596/978-1-4648-1602-4.

19. World Bank. (2022). Poverty and Shared Prosperity 2022: Correcting Course. Washington, DC: World Bank. DOI: 10.1596/978-1-4648-1893-6.