Household debt burden growth factors: Evidence from Russian regions

Abstract

Subject. This article discusses the issues of social inequality, financial literacy of the population, and the peculiarities of the development of the banking system in some regions of Russia. Objectives. The article aims to assess the impact of economic, social, demographic, and religious factors on changes in the level of debt burden of residents of Russian regions. Methods. For the study, I used a regression analysis of the Rosstat and the Bank of Russia panel data. Results. The estimations show that a decrease in per capita incomes and an increase in the level of social inequality have a positive effect on the debt burden growth. The debt burden increases with an increase in the percentage of the population below working age and a decrease in the percentage of the population over working age, as well as an increase in the percentage of the employed with higher education. The level of debt burden is higher in regions with a wide spread of Buddhism and lower in regions with a wide spread of Islam. Conclusions. The upward trend in the debt burden of residents of regions characterized by a low level of economic development and high social inequality threatens to reduce the standard of living. However, the possibilities of neutralizing it by means of monetary and macroprudential policies and through the implementation of financial literacy programmes are limited. It is necessary to implement capital-intensive measures to develop the economic base of problem regions.