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Economic Analysis: Theory and Practice
 

Poverty in the European Union and in Russia: A comparative analysis

Vol. 20, Iss. 4, APRIL 2021

Received: 14 January 2021

Received in revised form: 9 February 2021

Accepted: 24 March 2021

Available online: 29 April 2021

Subject Heading: ANALYSIS OF HUMAN CAPITAL

JEL Classification: E21, E24, E25, E64

Pages: 697–717

https://doi.org/10.24891/ea.20.4.697

Eka R. ERMAKOVA National Research Ogarev Mordovia State University (MRSU), Saransk, Republic of Mordovia, Russian Federation
eka-tsulaya@yandex.ru

https://orcid.org/0000-0001-8464-9605

Dar'ya V. VASHURKINA National Research Ogarev Mordovia State University (MRSU), Saransk, Republic of Mordovia, Russian Federation
vashurkina.dasha@yandex.ru

ORCID id: not available

Subject. The article considers and compares methods used in the European and domestic practice for determining the poverty line.
Objectives. Our aim is to underpin the need to abandon the absolute approach to determining the poverty line in Russia in favor of relative approaches.
Methods. We employ general scientific methods of cognition (comparison, analysis, and synthesis) and special methods of economic science (rationed assessments). The data of the Federal State Statistics Service and its territorial bodies, the Statistical Office of the European Communities, etc. serve as the information base of the study.
Results. The paper shows the failure of the absolute approach to poverty measurement, reveals its shortcomings, determines that it distorts the picture of economic reality in the study of poverty. We apply the European monetary approach to poverty measurement. The comparative analysis of poverty rates in Western Europe and in Russia confirms the existence of extreme forms of poverty, both in developed European States and in our country. The paper uses the ‘zone theory’ to assess the severity of poverty in Russia; the actual values of these indicators in Western Europe serve as thresholds.
Conclusions. The use of the relative monetary approach to measure poverty in the country gives a more accurate idea. Since 2021, Russia has switched to a similar method of calculating the subsistence rate and the minimum wage. Hence, the officially recorded level of poverty in the country will increase, and this will require additional measures to support the poor by the State.

Keywords: poverty, poverty measurement, minimum subsistence level, deprivation

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