Importance Under the turbulent socio-economic and geopolitical processes, it is crucial for Russian regions to escape new hazards in their development, including the so-called 'poverty trap'. The latter is a closed cycle, when scarce funds result in a decrease in expenditures for education, so that the accumulated amount of resources is much less. Objectives The objective of the paper is to analyze trends in investment in fixed capital of the education sphere in the South of Russia regions to reveal the effects that can be interpreted in the context of the 'poverty trap' concept. Methods The paper provides a theoretical underpinning for the poverty trap; analyzes statistical data on changes in investment in fixed capital of the education sector and per capita monetary income of residents of regions of the Russian South for 2005–2014. Results In the South of Russia, there are regions that are in no danger of facing the poverty trap, however, other regions may get trapped in the long-term and even in the short-term perspective. Significant investing in fixed capital of education sphere in the Krasnodar oblast and the Rostov oblast aligns with high per capita monetary income. Conclusions The analysis of statistical information reveals the risk of falling into a poverty trap for some regions of the South of Russia. Studying the preconditions for poverty traps enables to make recommendations for those involved in creating State programs aimed at socio-economic development.
Keywords: investment, poverty trap, economics of education
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