Eastern Europe and Russian Federation - Distributional impact of cash and in-kind social transfers in Eastern Europe and Russia

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Eastern Europe and Russian Federation - Distributional impact of cash and in-kind social transfers in Eastern Europe and Russia, Volume 1

Author:	Milanovic, Branko;	Collection Title:	Policy Research working papers ; no. WPS 1054. Transition and macro - adjustment
Country:	Europe and Central Asia; Russian Federation;	Date Stored:	2001/04/18
Document Date:	1992/12/31	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	(Historic)Economic Policy
Region:	Europe and Central Asia	Report Number:	WPS1054
Sub Sectors:	Macro/Non-Trade	SubTopics:	Rural Poverty Reduction; Economic Theory & Research; Services & Transfers to Poor; Poverty Impact Evaluation; Safety Nets and Transfers
Volume No:	1

Summary: The author empirically explores the distributional impact of social transfers in cash and in-kind in Russia and Eastern Europe. He shows that cash transfers, on the whole, are distributed almost uniformly (equally per capita) regardless of one's position in income distribution. By contrast, in market economies, absolute amounts of cash transfers decline as one moves up the income ladder. The family allowance is the only type of cash transfer that is somewhat focused on the poor in the socialist economies. Family allowances are paid for children, and since larger households are typically poorer, some redistribution is achieved. Education benefits are also slanted slightly toward the poor, primarily through the high share of public spending on primary education. As the level of schooling rises, the distribution of education benefits resembles more closely the distribution of income. Health care benefits are distributed uniformly, per capita. In market economies, on the other hand, public health benefits are targeted more to the poor - primarily because the rich often opt out of publicly-run programs. During the transition, cash benefits in the formely socialist countries must become more targeted as well as smaller in absolute amounts. The reforming socialist economies are likely to follow the corporatist earnings-linked model of continental Europe.


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