Ebook Fertility and Economic Crisis: Inflation, Wage Devaluation and Job Instability in Russia
The fall of the Soviet Union initiated an era of unparalleled political and economic reform given the breadth, depth and speed of the changes. The shift towards democracy and capitalism entailed greater personal freedom of thought, expression and lifestyles. The dismantling of the command economy allowed competition to flourish, thus improving productivity of the individual as well as the firm. Overall, individual well?being should have been enhanced through increased freedom and economic resources. However, in Russia and many other countries that underwent market reform, the transition was accompanied by economic crisis, which decreased well?being through material hardship and insecurity. Populations that had never dealt with extreme social risk suddenly found themselves unemployed, unpaid or unable to cope with inflation, while lacking a sufficient safety net and watching the “winners” of the transition achieve unprecedented wealth.
Undoubtedly, these complicated transformations greatly influenced demographic decisions, including whether and when a child was desired. Indeed, while the majority of men and women had two children in Russia before 1990, fertility fell to below 1.2 children per woman by the end of the 1990s (Zhakarov and Ivanova 1996). Research on this dramatic decline has shown very little relevance of postponement to the majority of this fertility decline, nor does it appear due to increasing childlessness rates; the decline seems to be due to stopping behavior in which second and higher order births declined (Sobotka 2002).
This dramatic fertility decline suggests that fertility decisions were impacted by the events that took place after market reform commenced. In this study, I address the question of whether the fertility decline in Russia was related to economic crisis and worsening economic conditions. The pathways through which fertility behavior was influenced during this critical time period remain ambiguous and under?specified in much of the literature on the fertility decline in post?communist countries. Frejka (2008) points out this shortcoming and admits the difficulty in separating different forces at work. In this paper, I identify specific ways in which the transition and economic crisis influenced fertility decisions in the Russian context; in particular, I consider the impact of wage dispersion and devaluation, inflation, and job instability. However, fertility behavior is assumed in this paper to have been impacted by myriad transformations that took place, including cultural change as well.
The first years of transition in Russia brought about rapid economic changes, including a substantial decrease in the value of wages (Barr 2001; Blanchard 1997), which increased the proportion of households living below the poverty line from 11% in 1992 to 36% in 1996, while the ratio of income in the top 20% to the bottom 20% increased 68% (Zohoori, Mroz, Popkin, Glinskaya, Lokshin, et al. 1998). Milanovic (1998) reports that, unlike the countries of the former Eastern Europe and the Baltic States, social assistance benefits were poorly targeted in Russia and were received more by better?off households than the poorest, indicating highly uncertain financial terrain for the poorest.
As in all former Soviet Republics, Russia’s educational legacy is one in which the state controlled who, how many, and what kind of education was achieved (Saar 1997). This was considered one mechanism through which the state engendered equality and supplied the economic apparatus with workers of the exact skill composition that were considered necessary (Marshall et al. 1995). Enrolment in higher education stagnated and even declined slightly during the early years of transition in Russia. It was not until 1995, the first year of economic recovery, that enrolment rates increased. Gerber (2000) explains this early decline, which was driven by lower enrolment of men, as a response to economic crisis and the opportunity costs of remaining in school when inflation and economic instability increased the need for earnings.
Changes in the labor force have occurred as well. Using census and Labor Force Survey data, Katz (2001) calculates that labor force participation rates in Russia declined from approximately 85% of women aged 20?29 in 1989 to 68% in 1998, 95% of women aged 30?49 to 85%, and 82% to 75% of women aged 50?54. ILO data (Laborsta) show a marked drop in the rate of the economically active. In 1989, 77% of all men 15 years or older were economically active, whereas 61% of women were. A decade later, a 10% decline was evident for both men and women. Labor force survey data on unemployment show a steady increase from 1992?1999, in which the unemployment rate more than doubled (5.2?12.6%). Men’s unemployment rates were slightly higher than women’s throughout this increase, but both have declined similarly from 2000?2007. Milanovic (1998) reported that unemployment benefits were also poorly targeted in Russia.
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