Measuring economic inequality: challenges, facts and assessment

Abstract

Purpose of research.The differentiation of the population in terms of welfare is part of the reality of the modern society and becomes the subject of acute debate. There is a need for a comprehensive assessment of the level of economic inequality and poverty to further substantiate the mechanism of coordination of activities to address the problems of their reduction. The joint use of monetary and non-monetary approaches allows achieving the goal of the study – a comprehensive and objective statistical assessment of the level of economic inequality and poverty of the Russian population.Materials and methods.The information base of the study was the data of the Federal State Statistics Service, as well as materials of analytical and scientific reports “Report on inequality in the world 2018”, “Poverty and income inequality in Russia and abroad”, “Russian society after the presidential elections – 2018: a request for change”, etc. Monetary indicators of economic inequality were used as statistical tools: decile coefficient of funds and Gini coefficient and non-monetary (subjective) approach. The subjective approach to poverty assessment is based on the data of the sample survey of household budgets in 2018.Results.A comparative analysis of economic inequality on a global scale shows that there are significant cross-country differences in income inequality, ranging from lower levels in Europe to high levels in the Middle East. Russia is one of the countries with a strong stratification of the population into rich and poor, where the value of the upper decile is 46% of the national income. The analysis of the dynamics of monetary indicators of economic inequality in the Russian Federation showed their increasing trend over the period from 1995 to 2018 and exceeding the established thresholds. According to the data of 2018, the value of the decile ratio of funds is 15,5 – that is, it is so many times the average income of the rich population exceeds the income of the poor. Gini index value of 0,41 for the same period indicates that the expected income difference between the two randomly selected income pairs will be 82% of the average income. The results of the non-monetary (subjective) approach to assessing economic inequality and poverty showed that the financial situation of 34,4% of households is unsatisfactory (incomes are barely enough for food, buying clothes and paying for housing and communal services are difficult). Even by 53,9% of households noted the lack of funds for the purchase of durable goods.Conclusion.The current situation with the increasing disproportion in the distribution of income of the population of Russia testifies to the active process of stratification of society. The results of the study showed excessive inequality in income of the population of the Russian Federation and the concentration of national wealth in the hands of the “upper” part of the first decile. The subjective approach to poverty assessment confirms the social stratification of society: more than 88% of Russians consider themselves to be poor.