Poverty and Inequality Statistics: Development of Methodology in the Russian Federation 22.08.2019 Geneva, 5-6 May 2015

AGENDA KEY OBJECTIVES SPECIFICS OF THE NEW METHODOLOGY EVIDENCE BASE – INCOME SURVEY AND ITS FRAMEWORK STUDIES TO TEST THE METHODOLOGY MAIN FINDINGS AND CONCLUSIONS BASED ON TEST STUDIES 22.08.2019 Geneva, 5-6 May 2015

Key Objectives To introduce specialized income survey into statistical practice To develop on its basis the information on differentiation and poverty indicators To test consistency of both conventional and additional indicators over time To justify the method for rapid and provisional estimates 22.08.2019 Geneva, 5-6 May 2015

SPECIFICS Full transition to evidence-based data in final estimates Preservation of rapid and provisional estimates but considering them as interim (rather than the only and final) measures Extension of indicators for poverty measurements Introduction of relative poverty line and rate based on the OECD standards Introduction of a two-level poverty measurement based on indicators of monetary and total household income Extension of indicators for describing poverty profiles 22.08.2019 Geneva, 5-6 May 2015

SAMPLE SURVEY OF INCOME AND PARTICIPATION IN WELFARE PROGRAMMES Coverage …..……………………….10,0 00 households in all Russian constituents, 20,400 individuals aged 16+ yrs, 4,500 children under 16 yrs Timeframe ……….......................... April 2012 (April 2014 and then annually covering 45,000 households) During the survey: Selected …………………... 20,000 addresses Visited …………………… 14,600 addresses Surveyed ……………….10,000 households Refused to respond….. 2,100 households (14%) No contact…………….. 2,500 addresses Dissemination of survey results : publication on Russian Statistics Committee’s web site (summary tables, micro data); official statistical publications 22.08.2019 Geneva, 5-6 May 2015

MACROECONOMIC INDICATOR MONETARY INCOME BASED ON INCOME SURVEY VS. MACROECONOMIC MONETARY INCOME INDICATOR INCOME SURVEY MACROECONOMIC INDICATOR Total monetary income 30,082,897 34,156,805 Total earned income 23,065,119 21,810,299 Remuneration 18,851,899 19,857,348 Income from self-employment 3,395,322 1,952,951 Income from other regular work activities 817,898   Total income from property 176,238 1,934,686 incl. income from real estate and other property lease 138,246 124,184 Total received transfers 6,841,540 6,514,042 Welfare benefits 5,785,217 6,494,532 including pensions 4,344,350 4,415,547 allowances, compensations and other benefits 1,440,867 1,811,841 Monetary receipts from individuals and institutions other than welfare authorities 1,056,323 19,510 incl. alimony and other similar payments 113,386 Other income 3,897,778 Total transfers made 2,796,232 2,550,890 Income tax on wages and salaries and self-employment taxes 2,532,662 2,093,991 Property tax, duties and other obligatory payments 111,136 300,877 Property insurance payments 152,434 156,023 Disposable income 27,286,665 31,605,914 22.08.2019 Geneva, 5-6 May 2015

Major tasks addressed through testing Experimental estimates of social and economic differentiation and (relative) poverty indicators under the OECD methodology obtained (based on 2008 HBS). Estimates of social and economic differentiation and poverty indicators obtained based on income survey and validated against the data obtained earlier through a simulation model. Data on relative poverty indicators under the OECD methodology obtained based on 2008-2011 HBS to see its behaviour over time 22.08.2019 Geneva, 5-6 May 2015

Estimates of differentiation and poverty indicators using the OECD methodology Purpose: as part of activities for Russia’s accession to the OECD to obtain relative poverty estimates using the OECD methodology for comparisons between countries. Specifics of the methodology: the notion of equivalent income (equivalent elasticity coefficient Ɛ=0.5). Estimates were prepared based on HBS quarterly data (2008-2011). 22.08.2019 Geneva, 5-6 May 2015

Estimates based on panel and quarterly HBS data, 2008-2011 22.08.2019 Geneva, 5-6 May 2015

Conclusions: HBS data provide acceptable time series for relative poverty in a year preceding income survey. It is better to make measurements using panel HBS data to exclude bias in relative poverty estimates due to non-compliance of the reference period to the OECD requirements. 22.08.2019 Geneva, 5-6 May 2015

Estimate based on income survey 95% confidence interval (limits) Population whose income is below subsistence minimum threshold, by major age and sex groups, (Ɛ=1); % of total population of relevant age group 20111) Estimate based on income survey 95% confidence interval (limits) Нижняя Верхняя Total population 12.7 12.4 11.0 14.1 Children under 16 yrs 19.9 24.7 21.1 28.7 Children under 3 yrs 16.2 25.8 21.2 30.9 Children under 7 yrs 18.7 Children from 7 to 16 yrs 22.4 19.5 25.5 Working age population 12.9 10.9 male aged 16-59 12.1 11.9 10.3 13.6 female aged 16-54 13.8 13.0 11.4 14.7 Youth aged 16-30 12.8 13.2 11.5 15.2 Male aged 16-30 12.0 10.1 Female aged 16-30 14.5 12.5 16.7 Working age individuals aged 30+ 10.4 13.7 Male aged 31-59 12.2 10.2 Female aged 31-54 14.0 10.6 13.9 Total elder people 6.1 3.5 2.9 4.2 Male aged 60+ 5.6 2.5 1.8 Female aged 55+ 6.3 3.9 3.2 4.7 1) Approved data. Estimates based on budget household surveys and macroeconomic indicator of income per capita. 22.08.2019 Geneva, 5-6 May 2015

Absolute poverty estimates based on simulation model and direct estimates based on Income Survey and HBS (Ɛ=1) 22.08.2019 Geneva, 5-6 May 2015

Average income per capita, roubles per month (Ɛ=1) (2011) 22.08.2019 Geneva, 5-6 May 2015

Estimates of differentiation indicators Approved data (based on the simulation model) Based on income survey (Ɛ=1) R/P ratio 16.2 14.4 Gini coefficient 0.417 0.391 22.08.2019 Geneva, 5-6 May 2015

Frequency distribution by monetary income, 2011 (based on income survey) 22.08.2019 Geneva, 5-6 May 2015

Employees’ frequency distribution by gross salary, 2011 22.08.2019 Geneva, 5-6 May 2015

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Conclusions: The pattern of distribution by level of per capita income based on Income Survey is consistent with theoretical lognormal distribution. Absolute poverty estimates based on Income Survey confirm the reliability of the estimates obtained from the simulation model. Income Survey can be used for evidence-based poverty and inequality measurements. The simulation model is an acceptable instrument for provisional estimates of main poverty and inequality indicators. 22.08.2019 Geneva, 5-6 May 2015

Conclusions (cont.): To ensure long-term consistent dynamics of the new indicator – relative poverty – panel HBS data should be used. 22.08.2019 Geneva, 5-6 May 2015

Population with income below subsistence minimum threshold over time In 2000, the methodology of subsistence minimum calculation was changed. In 2005, the structure of the consumption basket for calculating the subsistence minimum was changed. In 2013, the procedure for calculating subsistence minimum was changed. 22.08.2019 Geneva, 5-6 May 2015

Share of population with income below subsistence minimum in major age groups % of total population of a relevant age group   2000 2002 2004 2006 2008 2010 2011 2012 2013 Total population 29.0 24.6 17.6 15.2 13.4 12.5 12.7 10.7 10.8 Children under 16 yrs 33.7 28.7 20.9 18.8 18.6 19.2 19.9 17.9 Children under 7 yrs 26.9 22.7 16.7 15.0 15.7 18.7 15.6 Children aged 7-16 yrs 36.8 31.6 23.4 21.4 20.8 20.2 21.1 19.5 20.0 Youth aged 16-30 yrs 28.9 25.3 18.2 15.5 13.6 12.8 10.9 Male aged 16-30 yrs 26.5 23.9 17.5 14.8 13.0 12.0 10.2 Female aged 16-30 yrs 31.2 26.8 19.0 16.2 14.3 11.6 11.3 People of working age 30+ yrs 30.5 25.7 18.1 13.5 12.9 13.1 11.1 Male aged 31-59 yrs 27.7 23.6 14.5 12.1 12.2 10.3 10.5 Female aged 31-54 yrs 33.4 27.9 19.6 17.1 14.7 13.8 14.0 11.9 People above working age, total 17.2 12.3 8.5 6.1 5.1 5.0 Male aged 60+ yrs 16.1 11.5 10.1 8.4 5.4 5.6 4.7 4.6 Female aged 55+ yrs 21.5 17.7 10.4 8.6 6.4 6.3 5.3 5.2 22.08.2019 Geneva, 5-6 May 2015

Per cent of population with per capita income below: Per cent of population with income below the international poverty line using purchasing power parity 1) % of total population   Per cent of population with per capita income below: For reference: per cent of population with income below subsistence minimum threshold $1.25 per day $2 per day $2.5 per day $4 per day $5 per day $10 per day Russian Federation 2009 0.0 0.1 0.6 1.2 8.6 13.0 2010 12.5 2011 0.5 1.1 8.3 12.7 2012 0.4 1.0 7.3 10.7 2013 0.3 0.7 5.7 10.8 For reference2): Brazil 3.8 6.8 9.6 20.8 27.9 … 9.0 India 23.6 59.2 73.8 91.2 99.6 21.9 China 6.3 18.6 26.9 49.1 59.9 RSA 9.4 26.2 34.2 50.3 57.3 45.5 1) World Bank 2) Source: World Bank’s Poverty and Inequality Database 22.08.2019 Geneva, 5-6 May 2015

THANK YOU! 22.08.2019 Geneva, 5-6 May 2015