Russian middle class: Structure and financial behavior

Abstract

While the term “middle class” is widely used in economic literature, its quantitative estimates vary greatly, and the choice of an appropriate methodology is one of the key issues. Applying the base income approach together with behavioral metrics, we estimated the share of the Russian middle class at around 32% of population in 2018, the lowest level in the last decade. The deterioration observed in the position of the middle class was partially mirrored in the behavioral changes. This group of population was less engaged in the credit boom which started since 2016 and did not actively use financial leverage to support its consumption. Finally, the Russian middle class has changed its social landscape: the analysis of its occupational activity shows a strong shift towards state employment rather than entrepreneurial activity.