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The Soviet Household Under the Old Regime: Economic Conditions and Behaviour in the 1970s.

Ofer and Vinokur present a detailed study of Soviet household behavior in the penultimate decade of the Soviet regime. The methodology reflects the assumption that behavior is conditioned by the same influences that affect behavior in Western societies, with allowances made for institutional differences in the Soviet economy.

The book can be divided roughly into three sections: the first three chapters establish behavior patterns in a "typical" Soviet household based on a cross-section of data. Income patterns are examined, with particular attention paid to the importance of (legal and illegal under Soviet law) private earnings. Although private activity was found to be an important factor in urban areas, the overall impact on Soviet GNP was rather small (3-4%). The authors draw two (perhaps controversial) conclusions from these results: there was no substantial evidence of repressed inflation indicated by the existence of private activity, and private activity probably had a small effect on household welfare levels. Next, household saving was examined using variants of life-cycle theories of saving. Results were similar to those of Western studies: saving and the average propensity to save were positively correlated with income, and negatively correlated with family size. The authors concede that observed saving may be overstated because of the absence of negative savers, due to the absence of functioning credit institutions and to the exclusion of certain groups likely to be dis-savers (pensioners, student families, one parent families) from the data.

The middle chapters concern income distribution. Income and wealth inequalities are analyzed in Chapter 4, with the conclusion that income per household member and wages per worker were more evenly distributed in the Soviet Union than in Western countries. Private earnings reduced the level of wage equality. The increased equality may have been offset, however, by the lower general level of development, and the price paid in consumer choices and personal liberties. Chapter 5 examines the impact on household incomes of public sector transfers (either monetary transfers or direct services) comprising the Social Consumption Fund (SCF). The aims of the SCF were contradictory: there was an efficiency component (designed to allocate labor among different occupations optimally and to maximize labor force participation) at odds with the equity component (designed to prevent poverty and to increase social equality). The conclusions reached concerning the effects of the SCF are mixed: low-income families received larger values of education services, but perhaps lower values of health services; money payments, according to the authors, shrank with family income (unlike in previous studies (cited by the authors), where money payments rose with income); high-income families received more services via subsidies, excluding food subsidies; and, finally, the SCF reduced income inequalities, but not, the authors suggest, to the extent indicated by Soviet analysts. In chapter 6, proportions of the Soviet population living in or on the verge of poverty are estimated, then an attempt is made to characterize the typical poor Soviet citizen. The authors' conclusions agree with official Soviet claims that poverty had diminished in the period 1965-1980, but they point out that 22% of Soviet households were still in or on the verge of poverty. Although more prevalent among retirees, the inactive, and single-parent (mainly single-mother) families, poverty was noticeable in nearly every type of household, including those in which both spouses worked in the state sector. The presence of private incomes reduced the probability of poverty significantly.

The final two chapters examine issues concerning the place of women in the work place and in the family. High earnings differentials (a woman's wage was, on average, two-thirds of a man's wage), unequal division of home labor (a woman spent over two hours working in the home for every hour spent by her spouse), and high participation rates placed a heavy burden on Soviet women. On the other hand, the authors point out, women made gains in the areas of educational opportunities, occupational choice, and social activity. The authors summarize Soviet and Western theories of earnings differentials, and then examine ideological and historical factors which affected the differential. The analytical core of the chapter attempts to explain wages through job specific differences in hours worked (i.e., differences in the definition of "full-time" in different occupations), education, experience, age, the branch in which the observed worker was employed, and the role of the worker (e.g., managerial vs. semi-skilled). Soviet wage differentials between sexes were very similar to those in Western countries, and factors explaining these differentials were essentially the same in the Soviet Union and in the United States. The final chapter considers traditional and modern roles of women in the work place and in the family. Similar to trends in the West, many Soviet women over the past several decades migrated from the countryside to the city and entered the labor force. Unlike Western women, however, Soviet women have not seen the burden of household labor decline through labor saving devices or labor sharing. The authors analyze the reactions of Soviet women in the labor market and conclude that their responses were similar to those of women elsewhere: short-run decisions were based on expected wages, levels of income, children; long-run decisions were determined by education levels and fertility.

The data underlying these analyses were drawn from interviews of Jewish emigres, and concern the situation in the 1970s. Since the sample does not adequately represent a cross-section of the Soviet population, the authors were forced to make certain adjustments. The results describe the Soviet household only to the extent that the adjustments eliminate biases in the sample. The authors outline these adjustments in detail, and indicate where adjusted or original data were used. Other weaknesses in the results occur when a sub-sample must be used to investigate certain questions; the authors carefully examine the results in such cases and discuss the implications.

This volume will be seen by some as an anachronism, since the economy it examines no longer exists. The book, however, will be of interest to microeconomists generally, as a study of behavior in a different economic environment, to labor economists and economic demographers, to those interested in the role of women in the economy, and of course to Soviet and post-Soviet specialists.
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Author:Nowakowski, Joseph M.
Publication:Southern Economic Journal
Article Type:Book Review
Date:Oct 1, 1993
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