Growth, Poverty and Inequality: Eastern Europe and the Former Soviet Union

Contents......Page 7
Foreword......Page 15
Acknowledgments......Page 17
Acronyms and Abbreviations......Page 19
Overview......Page 23
Trends in Poverty in the Region, 1998–2003......Page 26
Factors Contributing to Poverty Reduction, 1998–2003......Page 38
Nonincome Dimensions of Well-Being, 1998–2003......Page 44
16 Household Expenditures on Utilities Have Increased......Page 51
The Role for Public Policy......Page 56
Conclusions......Page 63
Introduction......Page 69
1.1 More Than 40 Million People Moved out of Poverty during 1998–2003......Page 73
Poverty in Nonincome Dimensions......Page 89
Conclusions......Page 98
2. How Has Poverty Responded to Growth?......Page 101
Growth and Poverty Reduction......Page 102
2.1 Since 1999, Growth Rates in the Region Have Been Higher than the World Average......Page 103
Changes in Distribution, What Happened and Why......Page 109
The Relative Shares of Growth and Changes in Distribution in Poverty Reduction......Page 112
Rural-Urban and Other Subnational Differences in Poverty Reduction......Page 114
Conclusions......Page 118
How the Poor Can Connect to Growth......Page 129
Economic Opportunities Have Expanded......Page 132
3.2 The Evolution of Pension Spending by Groups of Countries......Page 141
Why Are Many Workers in the Region Still Poor?......Page 151
Conclusions and Policy Recommendations......Page 162
4. Affordable Access to Quality Services......Page 169
Education......Page 171
Access to, and Affordability of, Health Services......Page 183
4.15 Health Insurance and Utilization in Armenia, 2001......Page 193
Conclusions......Page 205
Alternative Scenarios for Growth, Poverty Reduction, and Inequality......Page 211
5.2 Trends from Global Projections......Page 217
The Role for Public Policy......Page 225
Conclusions......Page 235
A. Data and Methodology......Page 237
B. Key Poverty Indicators......Page 258
Bibliography......Page 301
Index......Page 315
1 Using Purchasing Power Parity to Measure Poverty......Page 28
2 Nonincome Dimensions of Poverty and Millennium Development Goals in the Region......Page 54
3 Data for This Report: The World Bank’s ECA Household Survey Archive......Page 64
1.1 What Is an Appropriate Poverty Line for the Region?......Page 71
1.2 What Would Someone in the Region Living on Two Dollars a Day Consume?......Page 74
1.3 National Poverty Assessments Confirm Poverty Trends Based on International Poverty Lines......Page 75
1.4 Vulnerable Groups and Poverty: Roma, IDPs, and Institutionalized Populations......Page 86
1.5 Life Satisfaction in the Region Remains Low......Page 97
3.1 In Most Countries, Household Survey Data Report Higher Employment Figures than ILO Statistics......Page 135
3.2 The Role of Agriculture in Transition......Page 138
3.3 The Role of Remittances in the Region......Page 142
3.4 Improvements in Targeting: Lessons from Recent Policy Reforms......Page 152
3.5 Global Trends in the Number of Working Poor......Page 154
3.6 Informal Employment in Transition Economies......Page 156
3.7 Labor Market Study Discusses Ways to Enhance Job Opportunities in the Region......Page 163
3.8 Raising Agricultural Productivity......Page 166
4.1 Survey Data Provide Limited Information about Access to, and Quality and Affordability of, Utilities......Page 194
4.2 What Has Happened with District Heating?......Page 195
4.3 Electricity and Water Tariffs Remain below Benchmarks for Full-Cost Recovery......Page 200
5.1 EU Accession and Poverty Reduction Objectives......Page 214
5.2 Depleted Social Capital of the Poor Limits Opportunities......Page 218
5.3 Nonincome Dimensions of Poverty and Achieving the MDGs in the Region......Page 221
1 More than 40 Million People Moved out of Poverty during 1998–2003......Page 25
2 At the Country Level, Absolute Poverty Has Declined Almost Everywhere......Page 27
3 The Lowest National Poverty Line in the Region Is around Two Dollars a Day......Page 30
4a Children Face a Greater Risk of Poverty than Other Population Groups; in Most Cases, This Risk Has Increased over Time......Page 31
4b Poverty Reduction in Secondary Cities and Rural Areas Has Lagged behind Capital Cities......Page 32
4d There Are Marked, and in Some Cases Increasing, Differences in Poverty across Regions......Page 34
5 Working Adults and Children Continue to Form the Bulk of the Poor in the Region......Page 35
6 In Some Countries, Poverty Is Shallow; in Others, Deep......Page 36
7 While Changes in Distribution Have Gone Either Way in the EU-8 and SEE, They Have Moved in Favor of the Poor in the CIS......Page 37
8 Since 1999, Growth Rates in the Region Have Been High, with the CIS the Most Rapidly Growing Subregion......Page 39
9 Employment-to-Population Ratios Are Well below Lisbon Targets (70 percent) in the EU-8 and SEE and Often Trending in the Wrong Direction......Page 40
10 The Poor Have Benefited More than the Rich from the Growth Rebound in the CIS......Page 41
11 The Share of Growth in Poverty Reduction Is Dominant across All Regional Subgroups......Page 42
12 Access to Secondary Education Has Gone Up Virtually throughout the Region, but Some Countries Continue to Struggle to Arrest the Decline in Primary Enrollment Rates......Page 46
13 Hospital Utilization Rates Have Recovered, but Remain at Low Levels in Parts of the Low Income CIS Group......Page 48
14 The Poor Make Greater Use of So-Called Dirty Fuels for Heating......Page 49
15 In the Low Income CIS Countries, the Reliability of Water Supply Is Low and Shows Little Improvement......Page 50
17 Growth Will Move an Additional 21 Million People out of Poverty by 2007, but 40 Million Will Remain Absolutely Poor and More Than 100 Million Vulnerable to Poverty......Page 53
1.2 Poverty Incidence Varies across Countries in the Region, around 2003......Page 77
1.3 Poverty Depth in the Region, 1998–2003......Page 78
1.4 Levels and Changes in Poverty by Employment Status, 1998 to 2003......Page 80
1.5 Change in Poverty by Education for Representative Countries......Page 81
1.6 Capital Cities Gained More than Other Cities and Rural Areas, 1998–2003......Page 82
1.7 Variation of Poverty Risks by Regions, 1998/9–2002/3......Page 83
1.8 Changes in Poverty by Age, Relative to National Average......Page 84
1.10 Most Nonworking Poor Live in Households Where Someone Works......Page 88
1.11 Life Expectancy at Birth, 1990–2003......Page 90
1.12 Incidence of Tuberculosis, 1990–2003......Page 91
1.13 Poverty in the Dimensions of Consumption, Access to Water, and Health......Page 93
2.2 Growth Has Been Accompanied by Poverty Reduction......Page 104
2.3 The Poor Have Benefited More than the Rich from the Growth Rebound in the CIS......Page 106
2.4 Poverty Is More Responsive to Growth, the Higher the Level of Income and the Lower the Level of Inequality......Page 108
2.5 Distribution Has Moved in Favor of the Poor in Most CIS Countries......Page 110
2.6 “Decomposition” of Inequality Does Not Explain Declines in Most CIS Countries......Page 111
2.7 Share of Growth in Poverty Reduction Is Dominant across All Regional Subgroups......Page 113
2.8 Increase in the Ratio of Rural to Urban Poverty in Most Countries......Page 115
2.9 Urban Poverty Is More Responsive to Growth and Falling (or Rising) More Rapidly than Rural Poverty......Page 116
2.10 Partial Elasticity of Poverty Reduction to Growth Is Lower in Rural Areas......Page 117
3.1 Connecting the Growth to the Poor......Page 130
3.2 Real Wage Growth Typically Outpaced Net Employment Growth in Transition Economies......Page 133
3.3 The Structure of Employment Has Changed......Page 134
3.4 Employment in Service Sector Expanding; in Agriculture, Mixed......Page 136
3.5 Value Added per Worker Is Lowest in Agriculture......Page 137
3.6 Real Wage Changes Correlate with Poverty Changes......Page 143
3.7 Poor Gained from Real Wage Gains in SEE and the CIS......Page 144
3.8 Changes in Employment Rate, 1998–2002, by Quintiles for Selected Countries......Page 148
3.9 Safety Nets Cover Many Poor in the Region......Page 150
3.10 Sectoral Wage Employment for the Poor and Nonpoor in Selected Countries......Page 155
3.11 Large Wage Gap between Poor and Nonpoor Persists across the Region......Page 160
3.12 Productivity Distribution of Old, Restructured, and New Enterprises......Page 161
3.13 Wage Increases Outstripped Productivity Gains during the Economic Recovery in the Region......Page 165
4.1 MDGs in the Region: Infant Mortality and TB Incidence......Page 170
4.2 Regional Coverage of Education, Ages 7–14......Page 172
4.3 Inequality in Access to Primary Education in the Region, 1998–2002......Page 173
4.4 Regional Coverage of Education, Ages 15–17......Page 174
4.6 Gender Inequality in Access to Secondary Education, 1998–2002......Page 175
4.7 Recent Declining Trends in Regional Mathematics Performance (TIMSS)......Page 178
4.8 Mathematics Performance in Selected Countries of the Region, 1999–2003......Page 179
4.9 Role of Subnational Governments in Education, 1995–2002......Page 180
4.10 Aging Teaching Force in the Region, 1995–2003......Page 181
4.11 Cervical Cancer in the Region and Western Europe, 1970–2002......Page 185
4.12 Hospital Utilization......Page 186
4.13 Utilization Rates of Health Services by Quintiles......Page 188
4.14 Ratio of Out-of-Pocket Health Spending to Household Total Consumption, 1998–2003......Page 189
4.16 Reliability of Electricity in the Region in the Early 2000s......Page 196
4.17 The Deterioration in Water Provision in Tajikistan and Moldova......Page 197
4.18 Household Expenditure Shares for Electricity, Heating, Water, and Sewerage Have Increased from 1998 to 2002/2003......Page 198
4.19 Electricity Payments Are a Larger Share of Household Expenditures for Poor Households (Quintile 1) than for Rich Households (Quintile 5)......Page 199
4.20 Poor Households Are Less Likely than Rich Ones to Use Clean Fuels......Page 204
5.1 Population of the Region by Poverty Status, 1990–2002, and Outlook for 2007......Page 213
1 Transfer Payments for Social Protection Have Had an Important Role to Play in Reducing Poverty outside of the Low Income CIS Countries......Page 43
2 Achieving Subgroup-Appropriate Poverty Reduction Targets over the Long Term (2015) Will Require Significantly Higher GDP Growth Rates......Page 55
2.1 Poverty Has Been More Responsive to Growth in the Middle Income CIS Countries and SEE than Elsewhere......Page 105
3.1 Work Does Not Protect Families from Poverty in the Region......Page 131
3.3 Transfer Payments for Social Protection Have Had an Important Role in Reducing Poverty outside the Low Income CIS Countries......Page 153
4.1 Mathematics Performance, 1995–2003......Page 177
4.2 Impoverishing Effects of Catastrophic Health Expenditures......Page 191
4.3 In Most Countries, Households in Secondary Cities Were More Likely to Heat with Dirty Fuels in 2003 than in 1998......Page 203
5.3 Annual Growth Rates of Private Consumption Needed to Achieve Poverty Reduction by 2015, Country-Specific Targets with European Vision......Page 216