Resource information
The elderly in Russia have often been
among those least able to cope with all the changes that
have taken place during the transition. Unlike the situation
prior to reform-when pensions were stable-they now face
considerable uncertainty. If they have not been in poverty,
many have been close to it. While the elderly have
experienced difficulties, they have also been the
beneficiaries of a very large transfer of wealth. In Russia,
as in most transition economies, housing was privatized,
under giveaway terms. As a result, although many elderly
households have low incomes, based on their wealth, their
deprivation would appear to be less serious. Unfortunately,
in the absence of a developed financial system, it is
difficult to use this wealth without selling it. In Russia,
all households, not just the elderly, have not been able to
borrow. The existence of such large unencumbered wealth
holdings by lower income elderly households creates an
opportunity to provide what might be termed "housing
safety net insurance" at low public cost. More than
reducing the incidence of poverty, such schemes could allow
also many of the elderly to be able to move out of poverty
and into middle income status. The authors explain why many
of the elderly in the former Soviet Union (FSU), not just in
Russia, are likely to have so much housing wealth. Then they
discuss how financial instruments could access this wealth.
The authors also discuss the empirical situation of the
elderly in Moscow, illustrating the potential demand for
such products. Finally, they suggest that the results for
Moscow are likely to be similar in many other FSU countries
because these countries also have elderly populations who
also own a great deal of unencumbered housing wealth.
