Revisiting Consumption Smoothing and the 1998 Russian Crisis

Applying quantile regression techniques to Russian data we investigate the channels through which individuals experience changes in their well being. We find that married individuals in non-rural households with university-educated heads are less vulnerable to severe welfare shocks. For the most vulnerable individuals the labour market plays a key role in transmitting the effects of aggregate shocks through the unemployment channel whereas those individuals able to maintain their employment status are more able to cope with economic shocks. While increases in pension payments help individuals to cope with shocks, it transpires that vulnerable individuals rely more broadly on the support of relatives and the produce of their garden plots and dachas.