_Figure 27: Saving share for different groups of population_ <!-- Start of picture text --> 10.0% 10.0%<br>9.0%<br>8.0% 8.0%<br>7.0%<br>6.0% 6.0%<br>5.0%<br>4.0% 4.0%<br>3.0%<br>2.0% 2.0%<br>1.0%<br>0.0% 0.0%<br>2014 2015 2016 2017 2014 2015 2016 2017<br>Average Vulnerable Average Well-being improved<br>Non-vulnerable Well-being worsened<br><!-- End of picture text --> Note: Net saving share in disposable income Source: Authors’ calculations based on quarterly HBS.

The vulnerable population had slightly lower saving shares on average, and experienced a somewhat sharper savings decline during the crisis (Figure 27). In 2016, those in the vulnerable group were saving only 3.8 percent of their disposable income, while the non‐vulnerable saved 4.6 percent. Differences are more pronounced if we compare those who reported experiencing either improving or worsening material well‐ being. Those reporting worsened well‐being also have lower saving shares, but the decline in the savings share in this group was not very pronounced during the crisis. Those who experienced job losses had particularly low saving shares, dropping to mere 0.8 percent in 2016. Those who were coping with the worsened well‐being through the decrease in expenditure or through the help from the relatives also had very low or even negative saving shares (1.9 and ‐3.3 percent correspondingly in 2016). Those who report improvements in well‐being have a significantly higher savings share (7.2 percent in 2014), but also experienced a very sharp decline in savings during the crisis (to only 3.7 percent in 2016).

Dissaving was also a significant mechanism in alleviating poverty. The official poverty headcount would be 0.6 percentage points higher, and moderate poverty would be 2.6 percentage points higher in 2016 if people did not have access to the previously accumulated funds. The effects on moderate poverty were especially pronounced for the partially employed (4.4. p.p.), non‐employed (3.3 p.p.) and households with children and a single adult (3.9 p.p.).

# 6. Conclusions

The recent two‐year recession in Belarus had several salient features related to its welfare impact on households across Belarus, which are worth considering when thinking about mitigating negative income shocks on low‐income households in the future. First, in contrast to the previous crisis events, the economic recession of 2015–2016 affected material well‐being of the whole population including that of low income households; indeed, its impact was much more regressive than that of the previous two crisis episodes, when disposable incomes contracted more among higher income households. If we define a number of socio‐ economic groups based on characteristics such as residence, household composition, education and labor market status, those groups that had lower cash income before the recession in 2014 (i.e. groups that can be thought of as having a lower socio‐economic status) experienced a more negative change in their cash incomes, on average, throughout the crisis.

Second, the notable welfare impact of the recession was not captured in the dynamics of the poverty rate. While it increased slightly by one percentage point between 2014 and 2017, the share of households with incomes below the minimum consumption basket, as well as the share of households vulnerable to poverty, 24