Mathematical Modeling and Forecasting of the Demographic Future of Russia: Seven Scenarios

Abstract

Russia is currently experiencing a financial crisis, due to international sanc-tions coupled with a decline in oil prices. The length and consequences of this period of turmoil are unpredictable, but it will surely have a visible negative impact on crucial socio-demographic indicators. Recent demographic im-provements have become one of the most important indicators of the overall success of domestic policy for Vladimir Putin. In the next few years, however, Russia risks facing a repetition of the 1990s' demographic problems once again – with a new wave of mortality increases and a new wave of fertility decline. Pressing economic issues are currently receiving much more attention from the Government; yet an effective anti-crisis strategy also requires paying attention to the seemingly ‛long-term’ demographic problems. Several threats to recent demographic gains have appeared with the crisis. As inflation is rising, more of Russia's population is falling into poverty – and risks of impoverishment have traditionally been the highest for families with many children. As the resources available for families shrink, the recent upturn in fertility rates for second and third children may be reversed. When combined with the rapidly declining numbers of women in active reproductive ages (20–29 years) Russia is almost certain to experience a precipitous decline in fertility. In addition, a dramatic increase in the availability of alcohol is looming, reminiscent of the late 1990s. In 1998 Russia experienced a very serious financial crisis accompanied by a jump in inflation (by 84 %) – however, the excise duty on spirits was increased only much more modestly, by 20 %. As a result, during a single year the relative value of excise duty fell by one-third, leading to dramatic cheapening of vodka and other spirits. Throughout the early 2000s this fall stayed uncompensated for, and the increases in vodka excise taxes frequently lagged behind the inflation rate. This caused an enormous increase in mortality in 1998–2005, when Russia ‛additionally’ lost about two million lives. Today the recurrence of a mortality jump due to various initiatives on liberalizing the alcohol market is, unfortunately, a highly probable scenario. The Government has cancelled an earlier-planned increase in the spirits excise tax, which – given the high and rising rate of inflation – actually means their remarkable decline. The minimum price of vodka has been significantly reduced since February 1, 2015. Beer is supposed to return to sidewalk kiosks, the bans on alcohol advertising in mass media and on alcohol sales overnight are to be virtually lifted, etc. As a result, Russia may face a new round of population decline after all the recent claims of demographic victories. Even more sadly, this decline will probably be written off as the consequences of the economic diffi-culties, while in reality a new wave of depopulation could be averted – or, at least, substantially mitigated – by carefully designed and well-targeted social policy interventions (many of which are purely legislative and would not put any additional strain upon the budget). A new series of calculations performed by a team of researchers from the Russian Presidential Academy of National Economy and Public Administration (RANEPA), the National Research University Higher School of Economics, the Russian Academy of Sciences, and the Moscow State University demonstrates that ‛alcohol liberalization’ coupled with the absence of a new set of effective family policies may provoke a new demographic collapse with catastrophic consequences. In order to avert this disastrous scenario, appropriate measures must be taken immediately.

Keywords: demography, Russia, mathematical modeling, demographic forecasts, mortality, fertility, demographic policy.