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Minimum wages and labor market outcomes: evidence from the emerging economy of Russia

Author

Listed:
  • Alexander Muravyev

    () (Institute for the Study of Labor (IZA, Bonn) and St. Petersburg University Graduate School of Management.)

  • Aleksey Oshchepkov

    () (Center for Labor Marker Studies, Higher School of Economics (HSE), Moscow.)

Abstract

This paper revisits the effect of minimum wages on employment by taking advantage of a unique institutional setting and data from Russia. The main strength of the paper is the use, for identification purposes, of the large variation in labor market outcomes as well as in the minimum wage across the 89 regions (states) over 10 years, from 2001 to 2010. The study relies on the standard methodology introduced by Neumark and Wascher, in which various 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 adverse effects of the minimum wage on young workers in the form of higher unemployment among those aged 16-24. There are also signs that minimum wage increases lead to higher unemployment in the general population, but the effect is small. Our analysis also suggests that higher minimum wages lead to an increase in the share of workers employed in the informal sector.

Suggested Citation

  • Alexander Muravyev & Aleksey Oshchepkov, 2013. "Minimum wages and labor market outcomes: evidence from the emerging economy of Russia," HSE Working papers WP BRP 29/EC/2013, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:29/ec/2013
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    References listed on IDEAS

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    Cited by:

    1. Davidescu, Adriana Anamaria & Schneider, Friedrich, 2017. "Nature of the Relationship between Minimum Wage and the Shadow Economy Size: An Empirical Analysis for the Case of Romania," IZA Discussion Papers 11247, Institute for the Study of Labor (IZA).
    2. Anna Lukiyanova, 2015. "Earnings inequality and informal employment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 469-516, April.
    3. 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.
    4. Anna Lukiyanova, 2013. "Earnings inequality and informal Employment in Russia," HSE Working papers WP BRP 37/EC/2013, National Research University Higher School of Economics.

    More about this item

    Keywords

    minimum wages; unemployment; informal employment; Russia.;

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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