Poverty in the Russian Arctic: The Case of the Republic of Sakha (Yakutia)

Abstract

The distinctive feature of absolute poverty in the Republic of Sakha (Yakutia), as a region of the North and the Arctic, is its persistence over a long time (2003–2019). The growth of industrial production resulting from the extensive development of natural resources does not affect the income of Yakutia’s population. Using a database containing measurements of social well-being and living standards in 1990–2019, linear regression models of poverty in Russia and Yakutia were built. Based on quantitative and comparative analyses, endogenous poverty factors were identified in Yakutia. These are high cost of living and demographic patterns: high birth rate and dependency ratio and a significant share of the rural population. Ineffective social policy, when a large proportion of social support is provided to people who do not need it, also contributes to the sustainability of poverty. Both the federal government and the government of Yakutia have sufficient resources to solve the problem of absolute poverty. This requires a new social model, a more equitable redistribution of income, and the alleviation of inequality not only among social groups, but also from a regional perspective.

Keywords:

• Endogenous factors
• poverty
• inequality
• income
• social policy
• regression analysis

JEL CLASSIFICATION CODES:

• I32
• J11
• R50
• C22

Notes

1 Until 1990, the indicator of nominal wages was used as real monetary income. Inflation in the Soviet era (1970–1990) was determined based on Poletayev (2006, p. 18).

Additional information

Funding

The reported study was performed under the e-Asia Climate Call and funded by RFBR, project number 21-55-70104.