The March 2020 update to PovcalNet involves several changes to the data underlying the global poverty estimates. Some welfare aggregates have been changed for improved harmonization, and some of the CPI, national accounts, and population input data have been revised.
... See More + This document explains these changes in detail and the reasoning behind them. In addition to the changes listed here, a large number of new country-years have been added, bringing the total number of surveys to more than 1,900.
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This paper uses methods developed by the Commitment to Equity Institute and data from the Household Budget Survey to assess the effects of government taxation and social spending on poverty and inequality in Moldova.
... See More + The paper presents the first detailed distributional analysis of the tax and expenditure sides of the fiscal system, examining, in particular, the contribution of different taxes and transfers to poverty and inequality reduction in Moldova, as well as the cost-effectiveness of different taxes and transfers in achieving these poverty and inequality reduction goals. The analysis finds that the tax-benefit system in Moldova is quite pro-poor and has a significant effect on poverty and inequality, with the poverty reduction effect being stronger for lower poverty thresholds. Pensions provide much of the poverty-reducing effect which is not surprising, given that in an aging society like Moldova, pensions are the main income source for many households. Direct transfers are also quite effective in reducing poverty and are also efficient, providing a relatively high degree of poverty reduction per dollar allocated to these programs, but their overall effect on poverty is muted by their small budgetary allocations.
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Working Paper (Numbered Series) 141814 SEP 13, 2019
This paper uses methods developed by the Commitment to Equity Institute and data from the Household Budget Survey to assess the effects of government taxation and social spending on poverty and inequality in Moldova.
... See More + The paper presents the first detailed distributional analysis of the tax and expenditure sides of the fiscal system, examining in particular the contribution of different taxes and transfers to poverty and inequality reduction in Moldova, as well as the cost-effectiveness of different taxes and transfers in achieving these poverty and inequality reduction goals. The analysis finds that the tax-benefit system in Moldova is quite pro-poor and has a significant effect on poverty and inequality, with the poverty reduction effect being stronger for lower poverty thresholds. Pensions provide much of the poverty-reducing effect, which is not surprising, given that in an aging society like Moldova, pensions are the main income source for many households. Direct transfers are also quite effective in reducing poverty and are also efficient, providing a relatively high degree of poverty reduction per dollar allocated to these programs, but their overall effect on poverty is muted by their small budgetary allocations.
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Policy Research Working Paper WPS9010 SEP 13, 2019
This paper examines the impact of the recent recession in Belarus on poverty and broader measures of household welfare and compares the recent recession episode to previous economic crises in Belarus.
... See More + The paper constructs a measure of vulnerability to poverty, based on an estimated probability of falling below the national poverty threshold not exceeding 10 percent, which is estimated for each year of the household survey data between 2014 and 2017. The analysis finds that the recession of 2014-16 was qualitatively different from earlier recent crisis episodes (2008-09 and 2010-11) in that it affected low-income households to a much greater extent, and the negative welfare effects lingered. The paper also documents that although the recession did not result in a substantial increase in absolute poverty by the official definition, it led to a considerable increase in the share of households that are vulnerable to poverty. The greater degree of vulnerability is also evident from the growing share of the population that faced a risk of poverty within a year (going in and out of poverty). Household types for which the impact of the recession was most pronounced are households with multiple children, single-parent households, residents of rural areas, as well as those who were not employed, partly employed, or low-skilled employees. Coping strategies that were employed by the population were largely related to reducing expenditures and, among vulnerable households, food expenditures in particular, as well as drawing down on their savings.
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Policy Research Working Paper WPS9003 SEP 10, 2019
This paper examines the impact of the recent recession in Belarus on poverty and broader measures of household welfare and compares the recent recession episode to previous economic crises in Belarus.
... See More + The paper constructs a measure of vulnerability to poverty, based on an estimated probability of falling below the national poverty threshold not exceeding 10 percent, which is estimated for each year of the household survey data between 2014 and 2017. The analysis finds that the recession of 2014–16 was qualitatively different from earlier recent crisis episodes (2008–09 and 2010–11) in that it affected low-income households to a much greater extent, and the negative welfare effects lingered. The paper also documents that although the recession did not result in a substantial increase in absolute poverty by the official definition, it led to a considerable increase in the share of households that are vulnerable to poverty. The greater degree of vulnerability is also evident from the growing share of the population that faced a risk of poverty within a year (going in and out of poverty). Household types for which the impact of the recession was most pronounced are households with multiple children, single-parent households, residents of rural areas, as well as those who were not employed, partly employed, or low-skilled employees. Coping strategies that were employed by the population were largely related to reducing expenditures and, among vulnerable households, food expenditures in particular, as well asdrawing down on their savings.
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Working Paper (Numbered Series) 141815 SEP 10, 2019
The purpose of this paper is to introduce applications of RUSMOD -- a microsimulation model for fiscal incidence analysis in the Russian Federation.
... See More + RUSMOD combines household survey micro-data and fiscal policy rules to simulate the Russian tax-benefit system: the size and distribution of taxes collected and benefits paid, and the impact of the system on different population groups. Microsimulation models, such as RUSMOD, are habitually used in developed countries, and can be versatile budgetary policy tools. Using this model, the current tax-benefit system in Russia is examined. The impact of the system is measured across the income distribution, age groups, family types, localities, as well as across time. One of the applications of RUSMOD this paper aims to assess is the role of the tax-benefit system in explaining the incidence of informal employment in Russia. The paper investigates whether the existing system creates disincentives for formalization in terms of reducing disposable incomes and increasing poverty and inequality, and whether a hypothetical tax reform would be able to reduce the opportunity costs of formalization for informal workers, improve distributional outcomes, and increase fiscal revenues.
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Policy Research Working Paper WPS8994 SEP 03, 2019
This paper finds that informal workers are more likely to have inferior work conditions, but do not necessarily report worse subjective well-being.
... See More + Starting with lower wages, but also with less regularity of hours and paid vacation, informal workers have higher incidence of envelope payments than formal workers but not of hazardous or unstable jobs. After controlling for work conditions, informal workers do not have statistically significantly lower job satisfaction and under no specification are informal workers more likely to self-assess worse health than formal workers. Finally, there is some association between informal employment and household poverty and life satisfaction, but it is not robust to changes in econometric specification or sample composition. The authors conclude that the evidence indicates that informal employment in the Russian Federation is mostly a problem of labor productivity and the design of the social protection system, but worsening wages and some association between informality and household poverty indicate that informality may also be a social equity problem.
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Policy Research Working Paper WPS8989 AUG 20, 2019
This paper finds that informal workers are more likely to have inferior work conditions, but do not necessarily report worse subjective well-being.
... See More + Starting with lower wages, but also with less regularity of hours and paid vacation, informal workers have higher incidence of envelope payments than formal workers but not of hazardous or unstable jobs. After controlling for work conditions, informal workers do not have statistically significantly lower job satisfaction and under no specification are informal workers more likely to self-assess worse health than formal workers. Finally, there is some association between informal employment and household poverty and life satisfaction, but it is not robust to changes in econometric specification or sample composition. The authors conclude that the evidence indicates that informal employment in the Russian Federation is mostly a problem of labor productivity and the design of the social protection system, but worsening wages and some association between informality and household poverty indicate that informality may also be a social equity problem.
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Working Paper (Numbered Series) 141101 AUG 20, 2019
This study aims to answer a simple question: what the impact on poverty rates due changes in consumer prices because of changes in market structure of selected goods in Russia will be.
... See More + It uses WELCOM (Welfare and Competition), a statistical software interface for Stata, developed at the World Bank- that enables the estimation of potential distributional effects of changes in market competition through changes in consumer prices. Section two gives a summary of the academic underpinnings of this analysis. Section three describes restrictions to market competition in Russia, while section four describes the methods and data used. Section five summarizes the results and section six concludes.
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Real GDP growth in Russia surpassed expectations in 2018, reaching 2.3 percent, mostly due to one off effects of energy construction. Forecasted growth of 1.2 percent in 2019 and 1.8 percent in 2020 and 2021 reflects a more modest outlook.
... See More + Russia’s macro-fiscal buffers remain strong, with fiscal surpluses across all tiers of government and low public-debt levels. When compared to advanced economies, Russia spends less on health and education. Rebalancing in favor of these categories could improve the overall efficiency of public spending. Short-term inflationary risks have abated, with the Bank of Russia signaling a return to a neutral policy rate. Lending activity is recovering, but the banking sector remains afflicted with high concentration and state dominance. Having eased slightly, the poverty rate remains in double digits with many households close to the poverty line and lacking formal employment. Informal employment is rising in the face of close-to-zero net job creation by medium-sized and large formal enterprises. Key risks to medium-term growth include the expansion of economic sanctions, renewed financial turmoil in EMDEs, a dramatic drop in oil prices, and souring of the global trade environment. The recent double-digit expansion in household credit may also pose a risk to financial stability in the case of a deterioration in the macroeconomic environment.
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Working Paper (Numbered Series) 137997 JUN 01, 2019
Sanghi,Apurva; Emelyanova,Olga; Matytsin,Mikhail; Rostovtseva,Irina; Levitanskaya,Katerina; Gutierrez,Eva M.; Okawa, Yoki; Nagle,Peter Stephen Oliver; Wheeler,Collette MariDisclosed
Despite the significant progress Ukraine made on its structural reform agenda, social assistance reform remains a key priority in the face of high levels of poverty (estimated at 27 percent according to the World Bank (WB) methodology, 2016 data) and continuing fiscal pressures.
... See More + The modernization of the safety-net can provide much more effective welfare support to the population while consuming fewer fiscal resources. The key to this approach is fiscal consolidation and rebalancing of the fiscal resources from housing utilities subsidy (HUS) to minimum income support (GMI) for improved targeting of social safety net spending. This will entail a gradual contraction of the HUS and, the expansion of the GMI, and the integration of some child benefits such as the single mother benefit into the GMI. Such integration of support is expected to improve targeting of social spending, reduce fiscal pressures, improve benefits for poor households, simplify the system, standardize rules, and discourage welfare dependency. The end-goal for the reform is to develop a system that supports more equitable distribution of welfare expenditures, with the GMI playing a central safety net role, and HUS playing a smaller complementary role to support energy affordability for most vulnerable groups.
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Incoming data confirms that global growth lost momentum in 2018, driven by a noticeable deceleration in both advanced economies and emerging market and developing economies (EMDEs).
... See More + The loss of momentum was particularly pronounced in manufacturing amid signs of softening global investment and trade. The global manufacturing PMI suggests continued weakness in January and February 2019, with the index falling to its lowest level since mid-2016. After rising 8 percent in February, crude oil prices continued to increase in March this year: The price of Brent, the international marker, reached $68/bbl by the middle of the month, and WTI, the U.S. benchmark, increased to $58/bbl. In February, the Russian ruble gained 2.2 percent compared to the previous month, supported by the easing of global financing conditions, higher oil prices, and a relatively lower risk perception. Russia’s economic growth was weak in January with output in five basic sectors1 increasing by 0.2 percent, y/y, compared to a 1.9 percent growth, y/y, in December 2018. In February, annual consumer inflation accelerated to 5.2 percent, y/y, up from 5.0 percent, y/y, in January. Monthly inflation growth decelerated across all categories in February, sa, as January experienced the most intense VAT-pass-through effect. Labor market dynamics were stable in January, and real wages continued to grow but only increased by 0.2 percent compared to the same period in 2018. The federal budget balance improved in January compared to the same period last year on the back of stronger non-oil revenues. Credit expansion continued into 2019, but the fast-paced expansion in household credit could pose a risk to financial stability if the macroeconomic environment were to deteriorate. Key credit risk and performance indicators remained largely stable in early 2019.
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The paper employs the Commitment to Equity framework to present a first attempt at a comprehensive fiscal incidence analysis for Ukraine, encompassing the revenue and expenditures components of the fiscal system, including direct and indirect taxes, as well as direct, indirect, and in-kind transfers.
... See More + The fiscal system in Ukraine has high redistribution effects, decreasing the Gini inequality index by 21 percentage points, and the official measure of poverty incidence by 27.6 percentage points (considering all fiscal interventions including in-kind transfers). As in many other countries in the region, pensions are the main contributor to the redistribution effect of fiscal policy. However, Ukraine stands out due to the relatively high equalizing effect of direct transfers. Fiscal policy in Ukraine is pro-poor, with the lowest income decile benefiting the most. Overall, 60 percent of the population of Ukraine are net recipients from the fiscal system, the main categories of recipients being households with two or more children, single-parent households, and retirees.
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Working Paper (Numbered Series) 135124 MAR 06, 2019
The paper employs the Commitment to Equity framework to present a first attempt at a comprehensive fiscal incidence analysis for Ukraine, encompassing the revenue and expenditures components of the fiscal system, including direct and indirect taxes, as well as direct, indirect, and in-kind transfers.
... See More + The fiscal system in Ukraine has high redistribution effects, decreasing the Gini inequality index by 21 percentage points, and the official measure of poverty incidence by 27.6 percentage points (considering all fiscal interventions including in-kind transfers). As in many other countries in the region, pensions are the main contributor to the redistribution effect of fiscal policy. However, Ukraine stands out due to the relatively high equalizing effect of direct transfers. Fiscal policy in Ukraine is pro-poor, with the lowest income decile benefiting the most. Overall, 60 percent of the population of Ukraine are net recipients from the fiscal system, the main categories of recipients being households with two or more children, single-parent households, and retirees.
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Policy Research Working Paper WPS8765 MAR 05, 2019
Are taxes in Ukraine progressive? Do social protection programs in Ukraine help reduce poverty and inequality? Which programs are more effective in alleviating poverty, per hryvnia allocated to them?
... See More + These are the questions that a recent Commitment to Equity (CEQ) analysis for Ukraine aims to address. This brief lays out the main aspects of the CEQ approach, and the main results. The analysis finds, for instance, that household at the bottom of the income distribution derive most of their final income from transfers of various types. The tax benefit system overall is quite progressive and contributes significantly to the reduction of poverty and inequality. However, not all programs are equally efficient in reducing poverty and inequality. Direct transfers, in particular means-tested poverty benefits, as well as child benefits have larger poverty and inequality impact per hryvnia allocated to them, then some of the indirect subsides. Efficiency of HUS depends on the choice of the poverty threshold. There is room for improvement in program design.
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Incoming data confirms that global growth lost momentum in 2018, driven by a noticeable deceleration in both advanced economies and emerging market and developing economies (EMDEs).
... See More + The loss of momentum was particularly pronounced in manufacturing amid signs of softening global investment and trade. The global manufacturing PMI suggests continued weakness in January and February 2019, with the index falling to its lowest level since mid-2016. After rising 8 percent in February, crude oil prices continued to increase in March this year: The price of Brent, the international marker, reached dollar 68/bbl by the middle of the month, and WTI, the U.S. benchmark, increased to dollar 58/bbl. In February, the Russian ruble gained 2.2 percent compared to the previous month, supported by the easing of global financing conditions, higher oil prices, and a relatively lower risk perception. Russia’s economic growth was weak in January with output in five basic sectors1 increasing by 0.2 percent, y/y, compared to a 1.9 percent growth, y/y, in December 2018. In February, annual consumer inflation accelerated to 5.2 percent, y/y, up from 5.0 percent, y/y, in January. Monthly inflation growth decelerated across all categories in February, sa, as January experienced the most intense VAT-pass-through effect. Labor market dynamics were stable in January, and real wages continued to grow but only increased by 0.2 percent compared to the same period in 2018. The federal budget balance improved in January compared to the same period last year on the back of stronger non-oil revenues. Credit expansion continued into 2019, but the fast-paced expansion in household credit could pose a risk to financial stability if the macroeconomic environment were to deteriorate. Key credit risk and performance indicators remained largely stable in early 2019.
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The global economy has continued to decelerate, growing by an estimated 2.3 percent in 18Q3 (q/q saar), down substantially from 3.3 percent in the previous quarter.
... See More + This was driven by the slowdown in the Euro Area and Japan. Oil prices rose 4.9 percent (m/m) in January 2019, and they continued to rise, with the price of Brent crude oil reaching 64/bbl US Dollars by mid-February. The ruble nominal exchange rate stayed flat in January compared to the previous month. Russia’s current account surplus shrank in January, compared to the same period last year, on the back of lower oil prices. In 2018, supported by robust global growth, rising oil prices, one-off construction projects and the FIFA World Football Cup, GDP growth in Russia accelerated to 2.3 percent, up from 1.6 percent in 2017 (consensus: 1.7 percent). Labor market dynamics were stable in December 2018. In 2018, the federal budget surplus (on a cash basis) totaled 2.7 percent of GDP compared to a 1.4 percent of GDP deficit in 2017. Key credit risk and performance indicators remained largely stable in November. Reshaping of the banking sector continues due to the ongoing sector clean-up by the Central Bank of Russia and the evolving regulatory landscape.
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Correspondence 136242 FEB 01, 2019
Rostovtseva,Irina; Okawa,Yohei; Matytsin,Mikhail; Nagle,Peter Stephen Oliver; Emelyanova,Olga; Sanghi,Apurva; Levitanskaya,Katerina; Baffes,JohnRussianDisclosed
The global economy has continued to decelerate, growing by an estimated 2.3 percent in 18Q3 (q/q saar), down substantially from 3.3 percent in the previous quarter.
... See More + This was driven by the slowdown in the Euro Area and Japan. Oil prices rose 4.9 percent (m/m) in January 2019, and they continued to rise, with the price of Brent crude oil reaching 64/bbl US Dollars by mid-February. The ruble nominal exchange rate stayed flat in January compared to the previous month. Russia’s current account surplus shrank in January, compared to the same period last year, on the back of lower oil prices. In 2018, supported by robust global growth, rising oil prices, one-off construction projects and the FIFA World Football Cup, GDP growth in Russia accelerated to 2.3 percent, up from 1.6 percent in 2017 (consensus: 1.7 percent). Labor market dynamics were stable in December 2018. In 2018, the federal budget surplus (on a cash basis) totaled 2.7 percent of GDP compared to a 1.4 percent of GDP deficit in 2017. Key credit risk and performance indicators remained largely stable in November. Reshaping of the banking sector continues due to the ongoing sector clean-up by the Central Bank of Russia and the evolving regulatory landscape.
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Correspondence 136242 FEB 01, 2019
Rostovtseva,Irina; Okawa,Yohei; Matytsin,Mikhail; Nagle,Peter Stephen Oliver; Emelyanova,Olga; Sanghi,Apurva; Levitanskaya,Katerina; Baffes,JohnEnglishDisclosed
In the second half of 2018, despite robust activity in the United States, there was a slowdown in global growth, which reached an almost three-year low of 2.4 percent (q/q saar) in 18Q3.
... See More + The subdued momentum persisted in 18Q4 with the global manufacturing PMI ending the year at a 27-month low. After falling almost 20 percent in November 2018, oil prices declined by an additional 13 percent in December. The drop in prices was driven by ongoing concerns of oversupply as well as weakening prospects for global demand in 2019, particularly in China. While the oil price tumbled in December, the ruble nominal exchange rate depreciated moderately. On the back of turbulence in the emerging markets and elevated geopolitical tensions, net capital outflows in 2018 reached about 4.8 percent of GDP (USD 72.1 billion), the highest reading since 2014. In November 2018, there was a slowdown in growth momentum in Russia, with agricultural production dropping and growth in industry slowing. Labor market dynamics were stable in November. December readings of consumer inflation slightly exceeded expectations (3.8 – 4.2 percent) interval according to the CBR forecast) and the 4 percent inflation target. The federal budget registered a surplus of 3.7 percent of GDP in the first eleven months of 2018.
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Correspondence 136282 JAN 29, 2019
Rostovtseva,Irina; Matytsin,Mikhail; Nagle,Peter Stephen Oliver; Emelyanova,Olga; Sanghi,Apurva; Levitanskaya,Katerina; Baffes,John; Okawa,YokiEnglishDisclosed
