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The Emerging Underclass in the Russian Federation: Income Dynamics, 1992-96


Lokshin, Michael & Popkin, Barry M. (1999). The Emerging Underclass in the Russian Federation: Income Dynamics, 1992-96. Economic Development and Cultural Change, 47(4), 803-829.


The transition to a market economy by the countries of Eastern Europe and the former Soviet Union has been a dramatic move from a relatively stable economic condition with equal income distribution to one with uncertainty, political and economical instability, and sharp polarization in resource distribution. The sweeping economic reforms have led the Russian Federation to eliminate most, if not all, general subsidies and significantly reduce subsidies and payments to the poor. The privatization of many activities and the process of allowing prices and exchange rates to fluctuate caused rapid economic and social changes. Since the onset of the economic transition, the establishment of a social safety net and the need to mitigate the social costs associated with the transition from a planned state economy to a market-oriented economy have been a major concern in the countries of the former Soviet Union. The political support of reforms in these countries after the end of communism and the question of political stability become vital to their governments. Poverty and inequality are among the factors that determine the distribution of political power. As A. B. Atkinson and J. Micklewright note, ‘‘The legitimacy of governments may be called into question if too large a gap opens between rich and poor.’’


Reference Type

Journal Article

Year Published


Journal Title

Economic Development and Cultural Change


Lokshin, Michael
Popkin, Barry M.