Advanced Search
MyIDEAS: Login to save this paper or follow this series

Minimum Wages, Unemployment and Informality: Evidence from Panel Data on Russian Regions

Contents:

Author Info

  • Muravyev, Alexander

    ()
    (St. Petersburg University GSOM and IZA)

  • Oshchepkov, Aleksey

    ()
    (Higher School of Economics, Moscow)

Abstract

This paper revisits labor market effects of the minimum wage by taking advantage of a unique institutional setting and rich data from Russia that cover 89 regions over 10 years, from 2001 to 2010. Our empirical analysis draws on the methodology introduced by Neumark and Wascher, in which labor market outcomes at the regional level are related to the relative minimum wage (captured by the Kaitz index) in a panel setting. We find that the minimum wage raises unemployment among young workers aged 15 to 24. In contrast, there is no evidence of disemployment effects of the minimum wage for workers aged 25-72, including women. In addition, minimum wage hikes are associated with an increase in informal employment.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp7878.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7878.

as in new window
Length: 38 pages
Date of creation: Dec 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7878

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: minimum wages; unemployment; informal employment; Russia;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. David Card & Alan Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," Working Papers 694, Princeton University, Department of Economics, Industrial Relations Section..
  2. Theo Eicher & Till Schreiber, 2006. "Structural Policies and Growth: Time Series Evidence from a Natural Experiment," Working Papers 48, Department of Economics, College of William and Mary.
  3. Tito Boeri & Pietro Garibaldi & Marta Ribeiro, 2011. "The Lighthouse Effect And Beyond," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57, pages S54-S78, 05.
  4. Gorodnichenko, Yuriy & Martinez-Vazquez, Jorge & Peter, Klara Sabirianova, 2007. "Myth and Reality of Flat Tax Reform: Micro Estimates of Tax Evasion Response and Welfare Effects in Russia," IZA Discussion Papers 3267, Institute for the Study of Labor (IZA).
  5. Dube, Andrajit & Lester, T. William & Reich, Michael, 2010. "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," Institute for Research on Labor and Employment, Working Paper Series qt86w5m90m, Institute of Industrial Relations, UC Berkeley.
  6. Gábor Kertei & János Köll?, 2004. "Fighting “Low Equilibria” by Doubling the Minimum Wage ? Hungary’s Experiment," William Davidson Institute Working Papers Series 2004-644, William Davidson Institute at the University of Michigan.
  7. Bazen, Stephen & Le Gallo, Julie, 2009. "The state-federal dichotomy in the effects of minimum wages on teenage employment in the United States," Economics Letters, Elsevier, vol. 105(3), pages 267-269, December.
  8. Bosch, Mariano & Maloney, William, 2007. "Comparative analysis of labor market dynamics using markov processes : an application to informality," Policy Research Working Paper Series 4429, The World Bank.
  9. Francisco Carneiro, 2004. "Are Minimum Wages to Blame for Informality in the Labour Market?," Empirica, Springer, vol. 31(4), pages 295-306, December.
  10. Amin, Mohammad, 2009. "Labor regulation and employment in India's retail stores," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 47-61, March.
  11. Charles Brown & Curtis Gilroy & Andrew Kohen, 1982. "The Effect of the Minimum Wage on Employment and Unemployment: A Survey," NBER Working Papers 0846, National Bureau of Economic Research, Inc.
  12. Margherita Comola & Luiz De Mello, 2011. "How Does Decentralized Minimum Wage Setting Affect Employment And Informality? The Case Of Indonesia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57, pages S79-S99, 05.
  13. Leif Danziger, 2009. "Endogenous Monopsony and the Perverse Effect of the Minimum Wage in Small Firms," CESifo Working Paper Series 2740, CESifo Group Munich.
  14. David Neumark & William Wascher, 1992. "Employment effects of minimum and subminimum wages: Panel data on state minimum wage laws," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
  15. Strobl, Eric & Walsh, Frank, 2011. "The ambiguous effect of minimum wages on hours," Labour Economics, Elsevier, vol. 18(2), pages 218-228, April.
  16. Magruder, Jeremy R., 2013. "Can minimum wages cause a big push? Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 100(1), pages 48-62.
  17. Sergei Guriev & Elena Vakulenko, 2012. "Convergence between Russian regions," Working Papers w0180, Center for Economic and Financial Research (CEFIR).
  18. Lee, David & Saez, Emmanuel, 2012. "Optimal minimum wage policy in competitive labor markets," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 739-749.
  19. Alexander Muravyev, 2008. "Human capital externalities," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(3), pages 415-443, 07.
  20. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2011. "Estimating the Causal Effect of Enforcement on Minimum Wage Compliance : The Case of South Africa," Working Papers 11145, University of Cape Town, Development Policy Research Unit.
  21. Sara Lemos, 2006. "Minimum Wage Effects in a Developing Country," Discussion Papers in Economics 06/1, Department of Economics, University of Leicester.
  22. Slonimczyk, Fabian, 2011. "The effect of taxation on informal employment: evidence from the Russian flat tax reform," MPRA Paper 35404, University Library of Munich, Germany.
  23. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March.
  24. Addison, John T. & Ozturk, Orgul Demet, 2011. "Minimum Wages, Labor Market Institutions, and Female Employment," Economics Series 278, Institute for Advanced Studies.
  25. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  26. Rama, Martin, 1996. "The consequences of doubling the minimum wage : the case of Indonesia," Policy Research Working Paper Series 1643, The World Bank.
  27. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, December.
  28. Ashenfelter, Orley & Farber, Henry & Ransom, Michael R., 2010. "Modern Models of Monopsony in Labor Markets: A Brief Survey," IZA Discussion Papers 4915, Institute for the Study of Labor (IZA).
  29. Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, vol. 88(5), pages 1094-1116, December.
  30. Khamis, Melanie, 2008. "Does the Minimum Wage Have a Higher Impact on the Informal than on the Formal Labor Market? Evidence from Quasi-Experiments," IZA Discussion Papers 3911, Institute for the Study of Labor (IZA).
  31. Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.
  32. David Neumark & J.M. Ian Salas & William Wascher, 2013. "Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?," NBER Working Papers 18681, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Betcherman, Gordon, 2014. "Labor market regulations : what do we know about their impacts in developing countries ?," Policy Research Working Paper Series 6819, The World Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7878. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.