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

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Listed author(s):
  • Muravyev, Alexander

    ()

    (Higher School of Economics, St. Petersburg branch)

  • 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.

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

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Length: 38 pages
Date of creation: Dec 2013
Handle: RePEc:iza:izadps:dp7878
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Keywords: minimum wages; unemployment; informal employment; Russia;

Find related papers by 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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Cited by:

  1. Bhorat, Haroon & Kanbur, Ravi & Stanwix, Benjamin, 2015. "Minimum Wages in Sub-Saharan Africa: A Primer," IZA Discussion Papers 9204, Institute for the Study of Labor (IZA).
  2. 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.
  3. Alexander V. Larin, 2014. "Downward Nominal Wage Rigidity: Unions’ Merit Or Firms’ Foresight?," HSE Working papers WP BRP 86/EC/2014, National Research University Higher School of Economics.
  4. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
  5. Belman, Dale. & Wolfson, Paul., 2016. "What does the minimum wage do in developing countries? : A review of studies and methodologies," ILO Working Papers 994893283402676, International Labour Organization.
  6. Paulina Broniatowska & Aleksandra Majchrowska & Zbigniew ¯ó³kiewski, 2015. "Does minimum wage reduce youth employment on regional labour markets in Poland?," Lodz Economics Working Papers 1/2015, University of Lodz, Faculty of Economics and Sociology.
  7. Sergey Kapelyuk, 2015. "The effect of minimum wage on poverty," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 389-423, 04.
  8. 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.
  9. Shi Li & Xinxin Ma, 2015. "Impact of minimum wage on gender wage gaps in urban China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-22, December.
  10. Kapelyuk Sergey, 2014. "Impact of minimum wage on income distribution and poverty in Russia," EERC Working Paper Series 14/03e, EERC Research Network, Russia and CIS.

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