Executive Summary

This research evaluates the economic impact of the Russia-Ukraine conflict on various Russian regions, particularly examining the relationship between personal prosperity and the share of soldiers from different regions participating in the war. The study highlights that war-driven budget flows have economically benefited some, especially in poorer regions that contribute a higher proportion of soldiers to the conflict, while other areas have suffered economic losses.
Key findings indicate that regions providing a greater share of soldiers have experienced a significant increase in mortgage debt per capita from 2021 to 2023. This correlation between military mortality rates and rising debt points to growing financial burdens in these regions. The study identifies a clear economic stratification across the country, with "warring Russia" (regions contributing the most soldiers) seeing improved financial assessments, particularly after the 2022 mobilization, while "metropolitan Russia" and "deep Russia" report more stable or worsening economic conditions.

The war has deepened political divides around economic sentiment. Supporters of Russia's actions in Ukraine are more likely to report improved financial circumstances, while opponents overwhelmingly report worsening conditions. This politicization of economic views reflects the increasing connection between financial well-being and political alignment.

Key Insights:
1. Economic Stratification: Poorer regions sending more soldiers have seen improved living standards due to war-related budget flows, while other regions face economic challenges.
2. Mortgage Debt Growth: Regions contributing more soldiers have experienced rising mortgage debt, indicating financial strain despite short-term state support.
3. Political Divide: Economic sentiment is becoming increasingly politicized, with supporters of the war more likely to report financial improvements, deepening the divide between different political and economic groups in Russia.
This research underscores the need for careful analysis of regional economic dynamics in wartime Russia and the potential long-term socioeconomic impacts of the war.

Even though existential threats largely displace economic concerns during wartime, individuals and society as a whole continue to operate in certain socioeconomic conditions, and the perception of their current situation remains a key element of their adaptation to changing everyday life¹. Meanwhile, the stability of an economic system is judged by the stability of the rules and means available for achieving financial success, hence the loss of economic stability means changed rules and means, elevating some and lowering others: the lot of the groups that are better positioned to benefit from the new rules and means improves, while the prosperity of the other groups that do not fit into the new order rapidly declines.

Dynamics of Russian economic statistics

Based on official statistics (see Chart 1), recent years have not been a time of prosperity for Russians. Already starting in 2008, the vigorous growth of their incomes slowed significantly, while after 2014 they mostly declined (with the exception of 2019, 2021 and 2023). In 2022, Rosstat recorded a 1.0% decrease in household income, but in 2023 it bounced back with 5.4% growth². And although in dollar terms real disposable income decreased by more than a quarter over the decade from 2013, from $806 to $586 a month³, the increase in ruble terms, in the context of international isolation and sanctions, allowed Russians to generally maintain their usual living standards and consumption.

The main drivers of income growth were budget flows to the miltary sphere – which translated into higher wages for workers there – as well as a labor shortage in Russia, which has driven up the cost of labor⁴. Significant budget allocations go to make weapons and military equipment, support related industries (light industry, transport, communications) and attract workers to these sectors. Against this backdrop, employers from other sectors of the economy are forced to raise wages to retain workers. Overall, this has led to an increase in ruble incomes of Russians, both in nominal and real terms, amid high volatility of the ruble exchange rate.
Journalist investigations show⁵ that men with financial problems from industrial provincial cities and rural areas in economically depressed regions are more likely to go fight in Ukraine. The so-called “national republics” of the Caucasus, along with Tyva, Buryatia and other federally subsidized regions, have the highest numbers of soldiers, both voluntary and mobilized, fighting in the Russia-Ukraine conflict⁶. At the same time, residents of Moscow and St Petersburg and other places with relatively high living standards like, for example, Yamalia, find themselves on the front line significantly less.

In the context of the Russia-Ukraine conflict and related economic difficulties, the budget flows to the military sphere have driven increasing prosperity for many Russians, especially in poor regions. To test this hypothesis, we will evaluate the relationship between the growth of personal prosperity (blagosostoyaniye) and the share of soldiers fighting in the Russia-Ukraine conflict from different regions of Russia.

Since there is no publicly available data on recruitment by region, we use data on the number of people from different regions killed in the conflict. We assume that the higher the proportion of combatants from a region, the more deaths there will be in that region and vice versa. The number of dead residents of each region is taken from the estimates of the BBC and Mediazona as of May 2024.⁷ Economic indicators are calculated based on Central Bank statistics for the last prewar year (2021) and the most recent year with data (2023). The military mortality rate is calculated as the number of deaths in the conflict per the number of men aged 18-49 in a given region. Unless otherwise noted, economic indicators are given in millions of rubles. These relationships were studied using correlation analysis, with the Pearson correlation coefficient calculated (statistical significance at p<0.05).

Mortgage debt is defined as the portion of a loan that the borrower has not repaid. This is not overdue debt. It indicates the total amount of mortgage loans accumulated by the population of a region. No significant correlations were found between the military mortality rate and the amount of mortgage debt adjusted for the population size of regions in either 2021 or 2023.
However, there is a significant positive correlation (0.384) between the military mortality rate and the increase in mortgage debt per capita for the period 2021-2023, i.e. the volume of mortgage loans taken out and not yet repaid has grown more in the regions whence people most often go to the front. In other words, in the regions that proportionally provide more soldiers, people's outstanding mortgage debt increased during the Russia-Ukraine conflict, although there was no such difference before. Such a connection can be considered an indirect sign that the payments received for fighting in Ukraine are being invested to improve housing conditions, which is also being financed by taking out mortgages.

Mortgage debt reflects the entire amount of debt that has accumulated since the loan was received until the present and thus only to some extent reflects loans taken out over the past two years. Much more indicative is the volume of mortgages issued in a given period. This is the sum of mortgage loans in general, not just the unpaid part. According to 2021 data, the regions from which the most people subsequently went to Ukraine did not stand out in terms of the volume of mortgages taken out. By 2023, however, the correlation had already turned positive and statistically significant at 0.470. The coefficient between the military mortality rate and the growth dynamics of the volume of mortgages is even higher (0.574), i.e., in the regions that proportionally provide more soldiers, mortgage indebtedness grew faster than in the rest of Russia (see Table 1).

The cost of a square meter of housing varies greatly across Russia depending on the living standards in a region. Where people live better, the cost of housing and mortgages is higher, and vice versa. This means that payments to soldiers go further in poorer regions, buying more housing than in richer regions. To exclude the impact of housing costs, we shall look at how the number of mortgage loans has changed: whereas at the end of 2021 there was no link between the number of mortgage loans in a region and how likely men from there would be to go fight in Ukraine, in 2023 a positive and significant correlation emerged, reaching 0.548. Thus, we get the same result. At the same time, the number of mortgages in the regions with more men going to Ukraine per capita is growing faster than in the rest of Russia: the correlation between the military mortality rate and the growth in the number of mortgages from December 2021 to December 2023 was 0.572. As we can see, all three indicators of mortgage activity by Russian households – outstanding mortgage debt, the volume of mortgage loans and the number of mortgage loans – show that it has increased the most in the regions whence men are more likely to go fight in Ukraine. The data suggests that soldiers and their families often spent the money they earn for serving in Ukraine to improve their living standards.

Despite the influx of cash into what we call the “highest contributing” regions (from where the share of soldiers fighting in Ukraine is higher than the national average), people are now taking out consumer loans more often. In 2021, these regions did not stand out as having a higher consumer debt burden; however, in 2023, a significant positive correlation emerged between the volume of consumer loans in rubles per capita and the military mortality rate (0.380), meaning the “highest contributing” regions began to take out more consumer loans (see Table 2). The connection between military mortality and growth in the consumer debt burden in rubles per capita is even more pronounced (0.581). Thus, in the regions whence men most actively go fight in Ukraine, the consumer debt burden has grown more compared to the rest of the country.

Consumer loan debt in the “highest contributing” regions also increased versus other regions in 2023: there is a significant correlation between the military mortality rate and the volume of consumer loan debt in rubles per capita (0.283). For 2021, there is no link between the “highest contributing” regions and loan activity. The correlation between military mortality and the growth in consumer loan debt is even more pronounced (0.402). This data also confirms our conclusion: in the regions whence men most actively go fight in Ukraine, the consumer debt burden of households has increased significantly during the conflict.

The most likely reason for this is that the economic changes brought on by the conflict and the international isolation of Russia have had a bigger impact on regions with relatively low living standards, whose residents are also more likely to go to fight in Ukraine. In regions where, even before this phase of the Russia-Ukraine conflict, income levels barely allowed people to meet their basic needs, a worsening economic situation has now forced them to take out more loans to maintain their usual living standards. Whereas previously the loan activity of Russians in the “highest contributing” regions did not differ significantly from the rest of the country, now it does. Such dynamics are playing out against the backdrop of a growing debt burden across the Russian population as a whole. According to the Central Bank and the Scoring Bureau (which tracks credit histories), during the conflict Russians began to take out more loans, the number of Russians with four or more loans has increased and the number of mortgage borrowers and the average number of loans per borrower has also gone up⁸. The number of microloans issued to Russians has increased just as dramatically during the conflict⁹. The dynamics are congruous with our data. During the conflict, the volume of microloans has expanded 53%, while debt is up 33%. Overall, the volume of microloans taken out by Russians is growing at a faster pace than in 2021. Meanwhile, there is a direct, significant link between military mortality in a region and the growth in the volume of loans there (0.581), as well as the growth in unpaid debt on them (0.402). In other words, indebtedness among residents of the regions with more men going to Ukraine per capita is growing faster than elsewhere. This means that, statistically speaking, the more men from a region who die in Ukraine, the faster the debt of the region’s residents is likely to grow.

At the same time, there is no significant connection between military mortality for a region and the number and volume of deposits per capita (see Table 3). This may indicate that payments received by soldiers and/or their families are spent on consumption and not saved. Perhaps the reason for this behavior is that the decision to go to Ukraine is driven by an inability to provide oneself and one’s family with the desired level of consumption, and payments for serving in the army are seen as a way to solve this problem. It is also possible that amid rising inflation, people tend to spend the money they receive as quickly as possible.

On the other hand, according to the Central Bank, individual bank accounts rose 18% in 2023, while in several of the poorest regions (Tyva, Chechnya, Buryatia, Altai, Dagestan, North Ossetia, Adygea, Mari El and Transbaikal) the growth was 25%¹⁰. According to our data, during the conflict the increase in the average deposit in these regions was 89%, while in other regions it was 53%. These nine regions send the most people to fight in Ukraine per capita¹¹, with the increase in savings there likely driven by military payments¹². There was no link between the military mortality rate and growth of deposits in Russian regions overall, but in the poorest regions there is such a correlation. Military payments have spurred growth in Russians’ savings, but only in the poorest regions, whence soldiers are more likely to come, is the impact on the financial situation of residents noticeable.

Residents of the “highest contributing” regions have more debt but do not stand out either on the number or the size of deposits per capita – with the exception of the nine regions mentioned above, where military payments have become a significant part of the economy.
Amid low housing availability, fighting in Ukraine is often one of the few ways for men in relatively economically depressed regions to enhance their material well-being. They likely seek to use their higher bank savings to fund long-term projects (getting education, having children, investing, etc.) and minimize the damage to their lives from negative economic circumstances. On the one hand, military payments (both to soldiers and workers in the military sphere) have become a significant source of capital growth (including housing), especially in the poorest regions. On the other hand, these payments have changed the system of economic incentives and the distribution of capital in Russia, driving a new type of economic stratification, with the amount of money on bank accounts and indebtedness simultaneously growing. Some Russians have benefited from the conflict, while others have lost a lot. The closer one’s work is to the defense sector, the more likely one is to have benefited. This trend is especially pronounced in economically depressed regions, where for many, going to Ukraine has become almost the only way to escape poverty.

Russians’ retrospective assessments of their financial situation

To understand the economic situation in which the main groups of the Russian population find themselves, it is not only and not so much formal statistical indicators that are important, but rather the subjective perception of the changes that have taken place: people make decisions based on these perceptions, thus eventually affecting the objective, statistically measured economic situation – their own and that of society as a whole. If people do not actually sense an improvement in their financial situation, they will not take risks and invest resources in long-term projects with delayed but more stable and higher returns.

In addition, the perception of the dynamics of people’s personal financial situation also affects what people think about the political situation in the country. Moreover, the dynamics of the situation are more important than its current, static state: even if relatively financially disadvantaged people feel that their life is getting better, they will perceive the current state of affairs more positively than their higher-earning compatriots who feel that their lives are getting worse and have no prospects.

In the second half of January 2024, the Chronicle research group conducted a telephone survey of 1,600 adult residents of Russia, representative of the country’s population by indicators like gender, age and federal district of residence. Meanwhile, from the end of January through the beginning of March, the pollster ExtremeScan conducted four waves of monitoring during the Russian presidential campaign using the same methodology, interviewing 1,000 Russians in each. We aggregated the collected data into one array of 5,600 respondents¹³. In the array, approximately every sixth (17%) Russian noted that their financial situation had worsened over the past year. Almost three out of five (59%) had failed to notice significant changes and approximately every fourth (23%) reported an improvement in their financial situation. Compared to previous periods of the Russia-Ukraine conflict, in 2024 the share of those whose financial situation had improved and or was stable increased and that of those whose had worsened decreased. Now, for every three who report an improvement, there are almost four who report a deterioration. As we can see, Russians consider the changes they have personally seen in recent months to be generally negative, but there is a steady trend of an increasing number of positive assessments (see Table 4).

The ratio of the share of those whose financial situation improved over the last year versus the share of those whose situation worsened is measured using what we call a “backward-looking personal prosperity index” to arrive at an integrated assessment of changes in prosperity¹⁵. If the value of the index is equal to one, this indicates equal positive and negative assessments of changes; an index value less than one indicates a predominance of negative assessments; and a value greater than one indicates a predominance of positive ones. On average, the index for the whole country in 2024 was 0.73, suggesting a slight predominance of the share of Russians who saw a deterioration in their financial situation versus that of those who noted an improvement.

After falling in the first six months of the Russia-Ukraine conflict, the headline index began to gradually rise in the autumn of 2022, and in 2024 it was twice as high as the summer 2022 value. This suggests that the population as a whole has gradually adapted to the new economic reality, with economic threats weighing less and less on their assessments. It could be the case that the growth in Russians' incomes recorded by Rosstat translated into an improved perception of the change in their personal financial situation.

After the start of the Russia-Ukraine conflict, budget flows to the military sphere boosted the incomes of Russians connected to it relative to the civilian segment of the economy. Initially, it was assumed that a numerically small group of Russians would be involved in the Russia-Ukraine conflict, receiving appropriate compensation for this. However, as the resources spent on the Russia-Ukraine conflict increased, more and more Russians began to engage in activities serving the special operation.

By 2024, the financial situation of men had changed more than that of women (see Chart 2), and in both directions: there are more men than women who said they were better off and those who said they were worse off, but fewer whose situation has remained the same (56% versus 62% among women). Employment in the military sphere, where men significantly outnumber women, contributes to growth in economic well-being; at the same time, there are also more men in the economic fields hardest hit by Russia's international isolation.

The youngest Russians are predictably the only age group in which financial improvements were reported more often than deteriorations (25% versus 19%). At their age, they are entering the labor market, seeing initial advancement in their careers and, accordingly, earning their first rubles and getting their first raises. In addition, the labor shortage has benefited them the most: besides the fact that this is a relatively small generation, it also bore the brunt of emigration and mobilization, meaning the balance of supply and demand in the labor market has become more favorable for the remaining young workers.

The predominance of reported financial deteriorations versus improvements widens with age, peaking at middle age (40-49 years), when the growth of expenses amid rising social obligations (aging parents, growing children) outstrips the increase in income from professional and career advancement. Middle-aged Russians most tangibly feel the difficulties associated with the prevailing economic instability, as well as the policy of autarky implemented by the Russian government¹⁶, since retirement is not far off, but expenses are already high. The oldest Russians feel the most stable financially: almost two thirds of them (64%) do not report any financial changes over the last year, which is attributable to their stable pension income.

In early 2023, political strategist Yevgenia Stulova proposed a concept of "four Russias" based on perceptions around Russia’s intervention in Ukraine: “metropolitan Russia,” “warring Russia,” “deep Russia” and “emigrant Russia”¹⁷. In the fall of 2023, in an interview with RBC, VTsIOM head Yevgeny Fyodorov agreed¹⁸ with Stulova's concept, noting that “metropolitan Russia” remained removed from the problems related to the Russia-Ukraine conflict, which had affected Muscovites, for example, to a lesser extent. Despite the obvious allusion to the center/periphery approach of economist-geographer Natalia Zubarevich¹⁹, Stulova's concept is not based on the geographical distribution of representatives of the “four Russias,” whereas in the context of the ongoing military conflict, which directly affects civilians in Russian regions bordering Ukraine, economic and geographical location has become a significant factor in perceptions. Therefore, we divide all regions into three types: 1) Moscow; 2) regions bordering Ukraine (Bryansk, Kursk, Belgorod, Voronezh, Rostov, Krasnodar and Crimea); and 3) all other regions²⁰.

At the beginning of 2024, no significant differences in the perception of changes in people’s personal financial situation were found between these three types of regions (see Chart 3). The past years of the Russia-Ukraine conflict had largely erased the differences across Russia, which, generally speaking, is quite unusual and most likely reflects some kind of transitional period.

Amid the Russia-Ukraine conflict, those that rely on the state budget for their income fared better than their compatriots in the private sector: pensioners (65%) and public sector employees (61%) more often saw no change in their financial situation than those employed in private companies (58%) and entrepreneurs (56%) (see Chart 4). The latter also had a higher share of both those whose financial situation was reported to have improved and those who said it had worsened. Overall, the differences between the public and private sectors are not great, indicating that both have managed to adapt to the new economic reality.

The financial situation of people without higher education was reported as more stable than Russians with higher education (62% versus 58%). The latter more often reported deteriorations in the past year (25% versus 21%). Thus, we can say that those without higher education have adapted more successfully than their more educated compatriots. Increased wages in industries supporting the Russia-Ukraine conflict, along with more blue-collar job vacancies, have boosted incomes for low-skilled workers, while those with university degrees have been disproportionately affected by the exit of foreign and high-tech companies from Russia.

At the beginning of 2024, Russians steadily reported more positive assessments of the change in their personal financial situation. This trend emerged in 2023, and at the beginning of 2024 it became even more pronounced. This again points to adaptation to life in the conditions of a protracted Russia-Ukraine conflict. Having recovered from the stress of the beginning of the conflict and announced mobilization, Russians have noticed the relative stabilization of the economic situation.

At the same time, their assessments of the change in their personal financial situations differ little across population groups. On the one hand, there are more stable groups, where people more often say that their financial situation has remained the same, including women, pensioners, public sector employees and people without higher education; on the other hand, there are groups whose financial situation changes more often, but in both directions. At the same time, clearly financially depressed sociodemographic groups cannot be identified. Young people have best adapted to the current situation, being the only group where more people saw their wealth rise than fall.

Dynamics of the backward-looking personal prosperity index during the Russia-Ukraine conflict

Despite the relative stability of the headline index in 2022-23, the dynamics across different population groups significantly fluctuated²¹. At the beginning of the conflict, the difference between “warring Russia,” “metropolitan Russia” and “deep Russia” seemed irrelevant, as the special military operation implied that the conflict would be limited and only “specially trained people” would do the fighting. This perception changed as it became obvious that the conflict would last a long time, in particular when mobilization was announced in the autumn of 2022 and the fighting got closer to the regions bordering Ukraine. At the beginning of 2022, residents of Moscow and most Russian regions assessed the change in their prosperity similarly – in stark contrast to residents of the regions bordering Ukraine – while after six months of fighting and a broad decrease in the prosperity index, the differences between the border regions and the rest of the country widened even more (index values of 0.25 versus 0.38-0.44, respectively) (see Chart 5).

However, 13 months later the situation shifted: “metropolitan Russia” and “deep Russia” continued to assess changes in their financial situation as before, but the assessment of “warring Russia” notably improved (from 0.25 in August 2022 to 0.47 in September 2023). This could be driven by less frequent shelling of border areas against the backdrop of a stabilizing situation at the front and the involvement of an increasing number of border region residents in developing the “new territories” in Ukraine – for example, building military and civilian facilities, roads and other infrastructure there – which is generously compensated by the state²². In September 2023, “metropolitan Russia” assessed the changes in its financial situation the most negatively: lower than in other periods and lower than other regions of the country, since the relatively high living standards of Muscovites compared to other regions were more affected by the exit of foreign companies, the severing of international ties and the loss of people’s usual way of life. All this took place against the backdrop of relatively high standards among Muscovites. In the regions bordering Ukraine, on the contrary, residents assessed the change in their financial situation more positively. Budget flows related to defense contracts, construction in parts of Ukraine controlled by the Russian army, monetary allowances for military personnel and their families, cash payments to socially vulnerable groups and the high adaptability of Russian entrepreneurs were factors that allowed the quality of life to remain at an acceptable level for large numbers of Russians.

By 2024, the provinces and Moscow had leveled out in terms of people’s assessments of the change in their personal financial situation as Muscovites had over time adapted to the new economic reality. The distribution of resources is also gradually becoming more and more centralized, a familiar setup for Russia, with resources flowing from the capital to the periphery. Thus, as fiscal reserves are depleted and markets deteriorate amid the country’s international isolation, Russians may increasingly note negative changes in their economic well-being.

Men are significantly more often involved in activities related to the Russia-Ukraine conflict, from fighting battles to building infrastructure. The relatively high pay for these activities could have boosted their assessments. In addition, the threat of mobilization began to be perceived less acutely at the beginning of 2024, while the general mood of Russians, according to data from the Public Opinion Foundation (FOM), has gradually calmed, becoming less anxious over the past year²³. Such feelings can also affect people’s perception of their personal financial situation. For the first time since the beginning of the intervention in Ukraine, men have begun to assess their personal financial situation more positively than women (18% of men said it had improved versus 16% of women), although in September 2023 there were no significant gender differences.

Even though the oldest Russians typically report a stable financial situation, the ratio of those whose situation was said to have improved versus those whose reportedly worsened has changed significantly throughout the conflict. At the outset, the stability of pension income kept this group protected from a decline in economic well-being (the index was 0.64); however, after six months (0.46) and then a year and a half (0.27), inflation and rising prices had convinced many pensioners that their financial situation had deteriorated. By 2024, they had managed to adapt to the changes, with the index swinging back (0.77), especially since the question concerns changes over the past year, and few pensioners really felt a change in 2024 versus 2023. Thus, at the end of 2023 and beginning of 2024, less and less did older generations of Russians report deteriorations in their financial situation.

The backward-looking index from August 2022 to January-March 2024 increased for all workers: from 0.44 to 0.82 in the public sector, from 0.29 to 0.85 in the private sector and from 0.37 to 0.80 among entrepreneurs. During the first year of the conflict, those employed in the private economy noted a deterioration in their financial situation (from 0.49-0.58 in February 2022 to 0.29-0.37 in August 2022). It was likely the case that in 2022, after the start of the conflict, it was Russians who depend on the state budget for their income that felt nervous, but government support for public-sector employees, along with payments and benefits, made this group more stable in the Russian labor market, and by August 2022 they rated the change in their financial situation relatively positively. Moreover, recall that it was the private sector, which provides most consumer goods and services, that felt the greater pain from the slump in the domestic market caused by foreign sanctions, closure of several lines of business, restrictions imposed by the Russian authorities and sharp reduction in imports.
In 2023, the private sector already managed to adapt to the changing environment, while inflation was not fully offset by the indexation of pensions, with both factors contributing to growth in assessments of a worsened financial situation among nonworking pensioners (0.19). By 2024, pensioners felt things had stabilized and, at least compared to 2023, few of them thought they were worse off (0.72).

The growth in the backward-looking personal prosperity index among working Russians may be a consequence of the labor shortage, which has tilted the supply/demand balance in favor of workers. This is indicated by the shifting groups that were most upbeat about changes in their personal financial situation: whereas in 2023 it was entrepreneurs and the self-employed, at the beginning of 2024 it was hired workers. Such dynamics are congruous with official economic statistics. In 2022, the government focused on supporting incomes among the lowest-earning households, which grew 27.8% year over year in nominal terms, while real incomes overall fell 2.8%²⁴. In 2023, the year-over-year growth of wages was 14.6% in nominal terms. Thus, whereas in 2022 the lowest-earning Russians felt the impact of government support amid heightened anxiety in the spring, driven by accelerating inflation and an expected shortage of goods, in 2023 the crisis was declared to have been overcome, yet this “success” was hardly noticed by the groups most dependent on the state.

The first months of the war economy and life under sanctions likely dealt a significant blow to higher-earning groups. Economists have already noted this, pointing out that the Russian banking system had little choice but to confiscate the foreign-currency deposits of Russians, who almost certainly belonged to higher-earning groups²⁵. After the start of mobilization and the involvement of wider groups of the population in the conflict (not only fighting battles but also, say, fulfilling state defense orders and bringing in so-called "parallel imports"), the need and opportunity arose for the government to spread the benefits around to more prosperous Russians too. As a result, these groups began to feel less left out (although the overall balance of assessments regarding their financial situation remains negative) than a year before and relative to other social groups outside of the economy serving the conflict.

Despite the confiscation of foreign-currency deposits and the problems that entrepreneurs encountered, a direct connection was observed between the level of income and assessments of changes in people’s personal financial situation throughout the entire period of the Russia-Ukraine conflict: the higher one’s income, the less negative one is. This became most pronounced in 2024. As can be seen in Chart 6, in September 2023, for Russians whose average income over the last three months was no more than RUB 12,000/month, the backward-looking personal prosperity index remained virtually unchanged (0.18 in 2022 versus 0.19 in 2023). Yet among Russians who earned more than RUB 70,000/month, the index increased from 0.69 in 2022 to 1.04 in the early autumn of 2023 and to 2.11 in 2024. At the same time, the index values have increased across all income groups, indicating gradual adaptation to the new economic reality. Amid the Russia-Ukraine conflict and economic turbulence, financial resources are needed to maintain living standards, with the greater one’s margin of financial safety, the more stable one feels. For those who lack such a safety margin, any economic problems in the country can become a source of major financial headwinds. At the same time, for now, state support for the lowest-earning groups of the population allows them to maintain their usual living standards, which generally were not high before the Russia-Ukraine conflict.

The assessments of Russians with and without higher education have also converged. At the beginning, holders of university degrees assessed the change in their financial situation much more negatively than Russians who did not receive higher education (0.42 and 0.63, respectively, in February 2022). In August 2022, the index values decreased and converged, at a respective 0.31 and 0.43, with the convergence trend continuing in September 2023 (0.40 and 0.44). At the beginning of 2024, they significantly increased while remaining close, at 0.70 and 0.76. In the first two years of the conflict, there was no period when those with a university education felt any advantage in terms of how their financial situation was playing out. In other words, in the context of the Russia-Ukraine conflict, educational capital, unlike financial capital, has not translated into greater perceived financial stability.

Qualitative research shows that politics affect people’s perceptions of their financial situation: for opponents of the military intervention in Ukraine, the economic difficulties associated with it are aggravated by the fact that they oppose the political decision to go into Ukraine; likewise, supporters of the intervention perceive all the associated problems, including economic ones, less intensely²⁶. However, whereas in all previous surveys, both among supporters and opponents of the intervention, the share of those who saw a deterioration in their financial situation was greater than the share of those who said it had improved, in 2024, for the first time, a predominance of positive assessments was noted among supporters of the intervention (see Chart 7). The gap between the index values for supporters and opponents of the intervention also reached a record in 2024 (1.12 versus 0.26, respectively). This ratio was 0.50 versus 0.13 in August 2022²⁷ and 0.56 versus 0.18 in September 2023, basically unchanged over a year.

Conclusions

By January-March 2024, Russians had adapted to the economic changes caused by the intervention in Ukraine. The number of those whose financial situation was reported to have worsened over the past year (23%) exceeded the number of those who said it had improved (17%), yet the gap between them was narrower than at any time since the beginning of the Russia-Ukraine conflict: the headline backward-looking personal prosperity index (0.73 in 2024) was significantly higher than in 2023 (0.42), in the summer of 2022 (0.38) and immediately after Russian troops went into Ukraine (0.54). Compared to the previous years, differences between most sociodemographic groups (based on age, region of residence and occupation) have leveled out, with the exception of gender. The pollster FOM obtained similar results²⁸ using a different research method, conducting door-to-door surveys across the country on February 23-25, 2024.

Nevertheless, income level and political views increasingly mark Russians. The more money one makes, the less often one is to report a deterioration in his or her financial situation, while people’s position on the decision to intervene in Ukraine differentiates respondents most strongly, and the gap is growing. Among supporters of Russia’s actions in Ukraine, the number of those who said their financial situation had improved was 1.12 times that of those who said it had worsened, whereas for every one opponent of the intervention who thought they were better off than a year before, there were four opponents who told us they were worse off. The gap between these groups had been noted before, but it was not so wide. Thus, the question of the dynamics of one’s financial situation is becoming increasingly political and less economic.

The survey data is largely in line with official economic statistics. The economy has managed to relatively stabilize as budget flows have helped support the living standards of the lowest-earning Russians and workers in the military sphere, with other factors being the high adaptability of local business and the contradictions inherent in Western sanctions. There is little divergence across the country’s regions, with the exception of the most economically depressed regions, where proportionally more soldiers come from and where people there have more debt. At the same time, these regions do not stand out much either in terms of the number or the volume of deposits per capita. It is there that military payments have become a major part of people’s finances and the local economy. This has changed the system of economic incentives and capital distribution across Russia, with deposits and indebtedness growing simultaneously in the country. It is also driving a new type of economic stratification: some Russians have benefited from the war, while others have lost a lot.

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