Monetary Poverty and Education in Russia

Abstract

Russian economic literature on poverty abounds with empirically unsupported assertions about the positive relationship between education and living standards. The purpose of this study is to find empirical evidence of this relationship using panel data for 82 regions of the Russian Federation for 2000–2021. We applied a dynamic OLS estimator to estimate a panel cointegrating equation and found strong negative and statistically significant dependence of indicators of absolute and relative monetary poverty on the highest level of education of the regional working-age population. We also performed the Dumitrescu-Hurlin pairwise causality test, which shows that higher education does not homogeneously cause more absolute monetary poverty, but more absolute monetary poverty does homogeneously cause better education as people try to avoid poverty by raising their educational level. The results of these econometric procedures suggest that the purpose of the study has been achieved.