studies generally relied on repeated cross sectional household survey data (McKenzie, 2003, EBRD, 2011, McCulloch, 2010, Dasgupta and Ajwad, 2012), this study analyses the crisis-human development nexus using longitudinal data in an emerging economy. As such, this is the first attempt to analyze the impact of crisis-induced income shocks in Russia by using longitudinal data and, thereby, to capture dynamic human behavior more accurately.<sup>3</sup> Longitudinal data reduce two potential sources of bias associated with cross-sectional data: (i) selection bias due to differences in observable factors between the crisis-affected and non-affected households, and (ii) selection bias due to endogeneity of being affected by an income shock. Longitudinal data has only been used in the context of advanced (OECD) countries in past research on the crisishuman development link (see for example Latif, 2010). The second contribution of this paper is that our methodology is not only able to analyze if there is a statistical significance between households affected and not affected by an income shocks, but is also able to discern if there is a statistical significance between the affected and not affected households before and after the crisis. As such we capture both, the impact of the crisis and the impact of an income shock sustained during the crisis year. The third contribution of the paper is that we go beyond analyzing the impact of the crisis on the average household in Russia, and we also study the impact on poor and vulnerable households separately. Performing the analysis on poor and vulnerable households separately is important because there is every reason to believe that a crisis will have a differential impact on these groups in comparison to the general population.

Our analysis of the crisis in 2009 in Russia shows that there was no statistically significant impact on average on food consumption, out-of-pocket health expenditures, and doctors’ visits of income-shock affected households. However, we find robust evidence that poor (lowest quintile) households affected by an income shock spent less on health services, compared to households not affected by an income shock.<sup>4</sup> Furthermore we find evidence that vulnerable people affected by the crisis in 2009 altered their health and nutrition behavior. In particular, households with low educational attainment of household heads (less than secondary school completed) that suffered an income shock tended to decrease expenditures on both food and health services, while households that had a higher number of elderly people (older than 60 years) tended to curb the use of health services. These findings suggest a particular need to protect the health and

> 3 While there are some studies that have looked at the impact of the process of transition as well as the impact of the 1998 crisis on health outcomes, it is worth mentioning that these studies rely on pooled longitudinal data and they usually span only 2 years.

> 4 By the same token, when the analysis is conducted to a restricted sample of the two upper quintiles of the population (4<sup>th</sup> and 5<sup>th</sup> ), we see that households that are affected by the crisis but are more affluent tend to spend more on health services.

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