Working Paper: CEPR ID: DP3389
Authors: Jeni Klugman; John Micklewright; Gerry Redmond
Abstract: A combination of economic growth and committed revenue-raising should give most governments in Central and Eastern Europe and the former Soviet Union considerable scope to devote increased resources to tackling poverty. We review the extent and nature of poverty across the transition countries, emphasising the phenomenon of the working-age poor. We consider governments’ fiscal positions and revenue raising tools, including the issue of whether some countries now have levels of external debt servicing that are so high as to hamper social sector expenditures. We analyse whether the introduction of credible unemployment benefit schemes in the CIS would aid labour market reform and hence help solve the problem there of in-work poverty (we first review experience in Central and Eastern Europe). We focus on the case of Russia, and simulate a simple scheme with 2000 household survey data. The Paper concludes by considering the role of improved wages for public service workers and the targeting of categorical benefits.
Keywords: social expenditures; poverty; transition
JEL Codes: H50; I30; P20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic growth (O49) | increased public resources (H54) |
| increased public resources (H54) | reduced poverty (I32) |
| economic growth (O49) | reduced poverty (I32) |
| introduction of unemployment benefits (J65) | improved labor market outcomes (J48) |
| improved labor market outcomes (J48) | reduced poverty (I32) |
| increased debt servicing (F34) | decreased social spending (H53) |
| decreased social spending (H53) | increased poverty (I32) |