Page "History of Russia (1992–present)" Paragraph 15

Thirdly, post-Soviet Russia did not inherit a system of state social security and welfare from the USSR.

Instead the companies, mainly large industrial firms, were traditionally responsible for a broad range of social welfare functions — building and maintaining housing for their workforces, and managing health, recreational, educational, and similar facilities.

The towns in contrast possessed neither the apparatus nor the funds for the provision of basic social services.

Industrial employees were left heavily dependent on their firms.

Thus, economic transformation created severe problems in maintaining social welfare since local governments were unable to assume financial or operational responsibility for these functions.