Income Stratification in Russia in Comparison to Other Countries

ABSTRACT

This article continues the topic of the first one in the series (see Obshchestvennye nauki i sovremennost’, 2017, no. 2). We rely on data from a number of nationwide surveys to analyze the specific features of the model of income stratification in Russian society in comparison with other countries (Germany, Hungary, Bulgaria, Venezuela, Mexico, and China). We show that the income stratification model, which is based on the principle of the correlation of the average per-capita income in a particular household with the median income in the country, does a good job of capturing the features associated with different models of society. Based on data from the International Social Survey Program (ISSP) comparative international study, we show that the model of income stratification in Russian society is normal for European countries. At the same time, when judged by the magnitude of income inequalities, Russia occupies an intermediate position between European countries and the countries of the former Third World.

English translation © 2018 Taylor & Francis Group, LLC, from the Russian text © 2017 “Obshchestvennye nauki i sovremennost’.” “Stratifikatsiia po dokhodam na fone drugikh stran. Stat’ia 2,” Obshchestvennye nauki i sovremennost’, 2017, no. 3, pp. 26–41.

Natalia E. Tikhonova, doctor of sociology, is a chief research fellow at the Centre for Stratification Studies, Institute for Social Policy, National Research University Higher School of Economics ([email protected]).

This article was made possible by support from the “Analysis of socio-economic inequality and redistributive policy, assessment of the level and quality of life of various social groups, and the study of the factors that allow people to lead healthy, active, and long lives” project, which forms part of the 2016 Basic Research Program of the National Research University Higher School of Economics.

Translated by Kenneth Cargill. Translation reprinted from Sociological Research, vol. 57, nos. 5-6. DOI: 10.1080/10610154.2018.1688081.

KEYWORDS:

• Russia incomes
• Russia inequality
• social stratification Russia

This article is the republished version of:

Income Stratification in Russia in Comparison to Other Countries

Notes

English translation © 2018 Taylor & Francis Group, LLC, from the Russian text © 2017 “Obshchestvennye nauki i sovremennost’.” “Stratifikatsiia po dokhodam na fone drugikh stran. Stat’ia 2,” Obshchestvennye nauki i sovremennost’, 2017, no. 3, pp. 26–41.

Natalia E. Tikhonova, doctor of sociology, is a chief research fellow at the Centre for Stratification Studies, Institute for Social Policy, National Research University Higher School of Economics ([email protected]).

This article was made possible by support from the “Analysis of socio-economic inequality and redistributive policy, assessment of the level and quality of life of various social groups, and the study of the factors that allow people to lead healthy, active, and long lives” project, which forms part of the 2016 Basic Research Program of the National Research University Higher School of Economics.

Translated by Kenneth Cargill. Translation reprinted from Sociological Research, vol. 57, nos. 5-6. DOI: 10.1080/10610154.2018.1688081.

1. According to the methodology of the World Bank (World Bank, 2014, p. 33), the poverty line can be established at USD 10 while taking into account purchasing power parity (PPP), which was defined in 2015 as USD 1 = RUB 23.97 (World Bank, 2016a). This means that the poverty line in Russia can be set at approximately RUB 7,191 of per-capita income per month for 2015 while the poverty level for the country is RUB 9,701 (FSGS RF, 2016а). As for poverty itself, its threshold at that time was established in accordance with the World Bank’s methodology (moreover, this is the maximum of all poverty lines that are used in this methodology for different types of developing countries) at RUB 3,596 per month (USD 5 per day) and was 2.7 times less than the official poverty level at that time.

2. By economic modernization, I mean industrialization, the commercialization of agriculture, the transition to new technologies based on the systematic application of scientific knowledge, the development of the secondary and tertiary sectors of the economy due to the relative reduction in the value of primary sector industries, and so on.

3. By social modernization, I mean urbanization, the growing differentiation of society, the expansion in the number of social roles that are performed by individuals, the formation of a class model of social structure, changes in the social control mechanisms (the decline of traditional authority and tradition as society accepts the dominant role that is played by the rule of “written law”), and so on.

4. By cultural modernization, I mean the secularization of public consciousness, a dramatic increase in the level of education of the population, and the emergence of a new cultural paradigm emphasizing progress, tolerance for the “other” within a context of the pluralizing forms of social life, and so on.

5. By demographic modernization, I mean a sharp reduction in the rates of mortality and fertility.

6. By sociocultural modernization, I mean the formation of new normative value systems and meanings and behavioral patterns, as well as the enshrining of rational thinking and internal locus of control, which together create the basis for the formation and successful functioning of new social institutions.

7. By political modernization, I mean the creation of institutions that are designed to bring about social consensus and legitimize power within the context of the pluralism of social interests—in other words, political parties, parliament, elections, secret ballots, and so on.

8. In rural areas, judging by the data of the Institute of Sociology of the Russian Academy of Sciences, only about 40 percent of residents currently own land, and even during the last economic crisis, when the role of subsidiary farming increased, more than 60 percent of villagers did not list activities related to the production and/or sale of agricultural products as the main sources of their income (Gorshkov and Tikhonova, 2016). This is evidence of the fact that the transition to the urbanized model of employment is already reaching completion in the village.

9. For more information about this study, see the following official websites: http://www.issp.org and http://www.gesis.org/en/issp/home.

10. Only industrial countries were compared with the dominance of the urban population. The countries of Asia and Africa that fall far behind Russia in terms of their level of development, which we know have a fundamentally different model of income stratification, such as Congo, Angola, India, Afghanistan, and so on, were completely excluded from the analysis.

11. In order to calculate household income indicators, the table used the PPP conversion factor, private consumption indicator (LCU per international $) (World Bank, 2016a). For the GDP per capita characteristic while taking into account PPP, we used the GDP per capita, PPP indicator (current international $) to demonstrate the country’s general level of development (World Bank 2016d). The lines that come as close as possible to the Russian figures were highlighted.

12. Hereinafter, all indicators related to the average, median, and so on income indicators for a particular country, unless otherwise specified, were calculated on the basis of data from the ISSP-2012 array.

13. By the data array of the Institute of Sociology of the Russian Academy of Sciences, we mean the results of the “What Do Russians Dream About?” study, which was conducted in March 2012 on the basis of a nationwide sample of 1,600 people representing the country’s population by territorial and economic region, and which are internally representative by sex, age, and type of settlement (for details, see Gorshkov, Tikhonova, Kozyreva, and Peilin, 2016).By the RLMS data array, we mean the results of the 21st wave of the Russian Longitudinal Monitoring Survey of the National Research University Higher School of Economics, which was conducted in the fall of 2012 (for more information, see http://www.cpc.unc.edu/projects/rlms and http://www.hse.ru/rlms). Thresholds that were established as being the optimal ones in the course of a large analytical study conducted by the following research team were used as the boundaries of income groups used here and hereinafter to create the model: V. Anikin, A. Karavai, Iu. Lezhnina, S. Mareeva, E. Slobodeniuk, and N. Tikhonova (supervisor). For a justification of these boundaries, see Anikin, Lezhina, Mareeva, and Slobodenyuk, and Tikhonova (2016).

14. The share of the urban population in China for the first time exceeded 50 percent only a few years ago (reaching 51.27 percent in 2011) (“World … ”, 2016). The birth rate has declined in China due to government policy, and it dropped off at a much later date than in Russia. Large-scale industrialization began 60 years later in China than it did in Russia.

15. The most characteristic features of the size of individual income groups and strata in different types of countries are highlighted in the table.

16. The models of income stratification here and hereinafter have been created by converting incomes in each country to USD while taking into account PPP (World Bank, 2016a).

17. Income stratification models are based on the recalculation of the amount of income, which is based on the median income level in Russia as expressed in USD while taking into account PPP.

18. As far as the question of how religion influences the income stratification model is concerned, this, unlike the other factors listed above, is rather controversial, and so it was not directly probed in our analysis.

19. Figure 6 was created by analogy with Figure 3. When recalculating the boundaries of income groups in Germany and Bulgaria, the indicators of median income in Russia as expressed in US dollars while taking into account PPP were considered.

20. The GDP per capita indicator was used for the calculations. See World Bank (2016d).

21. If we talk about the degree of unevenness of the distribution of the incomes of the mass strata of the population, then we notice that, as is evidenced by the data from various sociological studies, Russian society is characterized by a very even increase in income from one five-percent group to another one that increases at a multiplier of approximately 1.1. The only exceptions are three areas of income distribution that fall outside of this pattern. The first exception is the bottom five percent of the population, whose maximum incomes are 1.3 times less than the next group. The second exception is the median income distribution area, where three five-percent groups all have practically the same income level. Finally, the third exception is the upper three groups (15 percent), for which the maximum income multiplier in relation to the maximum income in the previous five-percent group grows initially to 1.2, then to 1.4, and finally to more than two. In other words, this demonstrates hyperbolic growth, where the curvature becomes almost vertical when it reaches strata that are not included in mass surveys.