Income inequality in Russia

The differences in lifestyle between rich and poor make a lot of [poor] people angry. That’s especially true for post-Soviet countries, like Russia.

But how big is that gap between rich and poor in Russia today?

According to Rosstat [the national statistical bureau], the income of the top 10% is 13× higher than income of the bottom 10%.

Can we trust this data? If so, is this ratio too high? Is it OK? What about other countries?

To compare different societies, economists reduced this income-by-increments data to the one single number, called Gini coefficient.

There are different estimates of Gini coefficient in Russia, but they are close to each other and differ only by ±5% (2016). We’ll use World Bank data because of the consistency of international data.

In the countries with the same level of economy, Gini index in Russia is pretty low.

In the countries with the same level of inequality, economy level is pretty high.

There’s the same distance between Russia and the most developed of developing countries, and between Russia and the least developed OECD countries (mostly Southern and Eastern Europe).

But in the late 2016, a new study was published. Economists included the data on import, export and taxes in their research. Significant changes along previous estimates are:

• More indicators to analyze. Besides income (i.e. salaries), they calculated wealth (i.e. cost of assets)
• Assets and income of Russian citizens, registered abroad, counted as assets and income of Russian citizens
• Data available by small increments, up to 0.001%.

With this data we can see that share of wealth, owned by the richest Russians, beats any record.

The bottom 99% of the Russian society is homogeneous in terms of inequality. It is not the most fair income distribution system in the world (whatever is considered fair), because it’s average by any world standards.

The inequality people see comes from the wealth, owned by the 0.01% (or ≈15000) richest Russian citizens. This wealth is not visible for “official” statistics, because it's owned or registered abroad.

Data: World Inequality Database, World Bank, Rosstat.