The Economy of Russia
A War Economy: Military Spending and Labour
Defence spending has risen sharply, boosting some industries but straining workers and the budget.
War changes the economy’s structure.
Spending
Military and security spending take a growing share of the budget.
Industrial boost
Defence factories expanded, raising output and wages in some regions.
Labour shortages
Mobilisation, emigration and an ageing population left many employers short of workers.
Long-term cost
Resources shift away from consumption and investment.
A tight labour market
Factories offer higher wages but still struggle to fill jobs.
Assuming higher output means better welfare
Composition matters.
Key takeaways
- Defence spending has grown.
- Some sectors boom.
- Labour is scarce.
- Other spending suffers.
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