Poverty among Russian Professionals: Scale, Causes, Trends

Abstract

Poverty among Russian professionals is widespread: at the end of 2019, almost a million people were affected. Its reduction, in comparison with the 1990s, occurred mainly in the mid-2000s, while since the 2010s the rate of reduction was slower than among other occupational groups. Poverty among professionals has several causes. These have to do with territorial, sectoral, regional, and other inequalities. The role of these inequalities has grown, although territorial inequalities play the leading role. Demographic factors, i.e., the size and the nature of dependency burden, especially young children, are also at play. The earnings of a significant fraction of professionals do not enable even to have 1–2 children without significant risks of poverty. Despite state aid to families with children, the significance of household size for poverty risks has not diminished. The risk of poverty among professionals also varies according to the quality of their human capital. Highly skilled professionals have a significantly lower risk of poverty than do lower-skilled professionals. Nevertheless, poverty among professionals in Russia is generally caused by a severe underestimation of their human capital. Individual solutions to escape poverty (i.e., migration, job change, secondary employment, and human capital investment) are currently deemed ineffective, even though some professionals still employ these strategies to a greater or lesser extent.