Russian inequality is worse than imagined; worse than other post-Soviet states

The World Wealth and Inequality project's latest white-paper, co-authored by Thomas "Capital in the 21st Century" Piketty, painstaking pieces together fragmentary data-sources to build up a detailed picture of wealth inequality in Russia in the pre-revolutionary period; during phases of the Soviet era; on the eve of the collapse of the USSR; and ever since.

The headline findings: official Russian estimates drastically understate national inequality; Russia is as unequal as the USA or even moreso; Russian inequality is more intense than the inequality in other post-Soviet states and in post-Deng China.

This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day. We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.

From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016 [Filip Novokmet, Thomas Piketty, Gabriel Zucman/World Wealth and Income Database]

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