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The Decentralization of Minimum Wage Setting in Russia Economies

Author

Listed:
  • Anna Lukiyanova

    (National Research University Higher School of Economics)

  • Nina Vishnevskaya

    (National Research University Higher School of Economics)

Abstract

In this paper, we study the minimum wage reform in Russia, which aimed to decentralize the fixing of the minimum wage and to increase the involvement of social partners in this process. The old system of the minimum wage setting was based on a single nation-wide minimum wage, which was differentiated across regions and occupations via a cumbersome framework of coefficients. The new system is a mixture of a government-legislated minimum wage at the federal level and collective agreements at regional levels. We show that the system of minimum wage setting has become more flexible. The reform succeeded in raising the real value of the minimum wage and increasing earnings of low paid workers without causing considerable negative effects in terms of employment. However, the reform did not lead to greater regional variation of minimum wages. It introduced some new imbalances: an unintended consequence of the reform was the emergence of separate regional wage sub-minima for private and public sector workers in many regions. The major challenge in coming years is to strengthen the institutions of collective bargaining, introduce evidence-based evaluation and boost the capacities of government and non-government monitoring agencies

Suggested Citation

  • Anna Lukiyanova & Nina Vishnevskaya, 2015. "The Decentralization of Minimum Wage Setting in Russia Economies," HSE Working papers WP BRP 90/EC/2015, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:90/ec/2015
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    References listed on IDEAS

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    Cited by:

    1. Alexander Muravyev & Aleksey Oshchepkov, 2016. "The effect of doubling the minimum wage on employment: evidence from Russia," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.

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    More about this item

    Keywords

    minimum wage; wage policy; Russia; decentralization;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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