UKRAINIAN MIDDLE CLASS IN THE NEW MILLENNIUM: TRENDS AND PROSPECTS
Keywords:middle class, middle-income group, median, inequality, consumer behavior, lifestyle, income distribution policy
Ukrainian society has undergone various transformations over the past twenty years. Adverse economic conditions and ineffi cient income distribution policies deterred the for mation of a large middle-income group, which should become the basis of the middle class. Developed countries, which in the last century reached the peak growth of the number and importance of the middle class, today indicate the process of “blurring” of this social group against the background of growing inequality. Against the background of global trends, Ukraine is facing a double blow — the income distribution, which is already shift ed towards low incomes, leaves no chance for positive changes in the social structure of society. Th e a im of the article is to establish trends in the formation of the middle-income group in Ukraine over a twenty-year period and assess the prospects for the formation of the middle class in the future, taking into account today’s Ukrainian realities and global trends. Th e novelty of the work is the analysis of a long series of dynamics to establish the trends of the middleincome group according to the classical approaches for international comparisons and according to the purely Ukrainian approach. In addition, micromodeling of incomes (expenditures) for 2020, taking into account the macroeconomic situation, allows us to assess the impact of the coronavirus crisis and quarantine measures on changes in the number of middle-income groups and the prospects of the middle class in Ukraine. Within the article classical methods of analysis of long series of data, in particular, the index method (basic and chain indices) are used for studying the dynamic changes in the formation of midd leincome groups. In order to assess the size of the middle-income group in 2020, the method of micromodeling is used: the 2020 microdata is modeled on the basis of the 2019 microdata (microfi le of the household living condition survey) and macro forecast data for the current year. Analysis of the dynamics of incomes, expenditures and various property character istics of the middle-income group over the past twenty years does not show positive trends. Quite the contrary, in Ukraine there is an impact of the global trend of “blurring” of the middle-income group as the basis of the middle class, with its specifi c features in consumer and investment behavior. Th e events of the last year also do not inspire optimism — by the end of the year the general decline in living standards and the growth of poverty is expected. In such conditions, the main burden of the crisis is expected to fall on the middle-income group. Th e article also considers the problem of the importance of forming the middle class for society and the feasibility of forming politics to this goal.
- OECD (2019). Under Pressure: Th e Squeezed Middle Class. OECD Publishing. Paris. Retrieved from doi: https://doi.org/10.1787/689afed1-en
- Banerjee, A. V., & Dufl o, E. (2018). What is middle class about the middle classes around the world? Journal of Economic Perspectives, 22 (2), 3-28. Retrieved from https://economics. mit.edu/fi les/10881 doi: https://doi.org/10.1257/jep.22.2.3
- Birdsall, N. (2010). Th e (indispensable) middle class in developing countries; or, Th e r ich and the rest, not the poor and the rest. In: Kanbur R., Spence M. (Eds.). Equity and growth in a globalizing world. (pp. 157-189). Washington. DC: World Bank. Retrieved from https://www.cgdev.org/sites/default/fi les/1423994_fi le_Birdsall_Indispensable_Middle_ FINAL.pdf
- Kharas, H. (2010). Th e emerging middle class in developing countries. OECD Development Centre. Retrieved from https://www.researchgate.net/publication/46457345_Th e_ Emerging_Middle_Class_in_Developing_Countries
- Lopez-Calva, L. F., & Ortiz-Juarez, E. A. (2011). Vulnerability approach to the defi nition of the middle class. Washington. DC: World Bank. Retrieved from https://www.researchgate. net/publication/228268922_A_Vulnerability_Approach_to_the_Definition_of_the_ Middle_Class doi: https://doi.org/10.1596/1813-9450-5902
- Amoranto, G., Chun, N., & Deolalikar, A. B. (2010). Who are the middle class and what values do they hold? Evidence from the World Values Survey. Manila: Asian Development Bank. Retrieved from https://www.adb.org/sites/default/fi les/publication/28430/ economics-wp229.pdf doi: https://doi.org/10.2139/ssrn.1743180
- Brandi, C., & Büge, M. A. (2014). Cartography of the new middle classes in developing and emerging countries. Discussion Paper, 35/2014. German Development Institute. Retrieved from https://www.die-gdi.de/uploads/media/DP_35.2014.pdf
- Middle class in Ukraine: identifi cation criteria. (2014). Kyiv: Razumkov centre. Retrieved from http://razumkov.org.ua/uploads/article/2014_ser_klass_kryterii_ident.pdf [in Ukrainian].
- Libanova, Е. (2003). Th e social stratifi cation of Ukrainian society: an attempt of statistic identifi cation and measurement. Ukrainian society, 1(2), 146-164. doi: https://doi.org/10.15407/socium2003.01.146 [in Ukrainian].
- Libanova, Е., Cherenko, L., Vasilev, O., & Reut, A. (2014). Population with medium income as the basis for middle class formation in Ukraine. National Security & Defence, 1-2 (144-145), 79-96. Retrieved from http://razumkov.org.ua/uploads/journal/ukr/ NSD144-145_2014_ukr.pdf [in Ukrainian].
- Libanova, E. (Ed.). (2012). Inequality in Ukraine: scale and opportunities for infl uence. Кyiv: Ptoukha Institute for Demography and Social Studies of the National Academy of Sciences of Ukraine [in Ukrainian].
- Kolot, А., & Gerasimenko, О. (2019). Social and labor development in the XXI century: the nature of global change, new opportunities, constraints and challenges. Demography and Social Economy, 1 (35), 97-125. doi: https://doi.org/10.15407/ dse2019.01.100 [in Ukrainian].
- Kolot, А., & Gerasimenko, О. (2018). Latest global trends in the area of employment and income and their impact on social inequality. Sotsial’no-trudovi vidnosyny: teoriia ta praktyka, vol. 1(15)/2018, 8-35 [in Ukrainian].
- Simonchuk, E. V. (2003). Srednij klass : Ljudi i statusy [Middle class: People and statuses]. NAN Ukrainy. In-t social [in Russian].
- Middle class in Ukraine: ideas and realities (2016). Kyiv: Razumkov centre. Retrieved from https://razumkov.org.ua/uploads/article/2016_Seredn_klas.pdf [in Ukrainian].
How to Cite
This work is licensed under a Creative Commons Attribution 4.0 International License.