Poverty in transition: social expenditures and the working age poor

Klugman, Jeni, Micklewright, John and Redmond, Gerry (2002) Poverty in transition: social expenditures and the working age poor (Innocenti Working Papers, 91) Florence, Italy. UNICEF

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.

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