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The Effect of Doubling the Minimum Wage on Employment: Evidence from Russia

Author

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  • Muravyev, Alexander

    (Higher School of Economics, St. Petersburg Branch)

  • Oshchepkov, Aleksey

    (NRU HSE, Moscow)

Abstract

We take advantage of a natural experiment in the minimum wage setting in Russia to study the employment consequences of large hikes in the minimum wage. In September 2007, the Russian government raised the federal minimum wage from 1,100 to 2,300 Rubles and simultaneously gave the regions the power to set their own minima above the federal threshold. In studying the effect of this reform, we follow the approach proposed by David Card and compare changes in employment rates and other labor market outcomes before and after the hike across regions with different shares of affected workers. We find some evidence of adverse effects of the 2007 hike in the minimum wage on employment. They are mostly visible in lower employment rates among the youth, as well as the increased informalization of employment.

Suggested Citation

  • Muravyev, Alexander & Oshchepkov, Aleksey, 2015. "The Effect of Doubling the Minimum Wage on Employment: Evidence from Russia," IZA Discussion Papers 9589, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9589
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    References listed on IDEAS

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    Cited by:

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    2. Ham, Andrés, 2018. "The Consequences of Legal Minimum Wages in Honduras," World Development, Elsevier, vol. 102(C), pages 135-157.
    3. Işık Enes & Orhangazi Özgür & Tekgüç Hasan, 2020. "Heterogeneous effects of minimum wage on labor market outcomes: A case study from Turkey," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-41, March.
    4. Amanda Y. Agan & Michael D. Makowsky, 2018. "The Minimum Wage, EITC, and Criminal Recidivism," Working Papers 616, Princeton University, Department of Economics, Industrial Relations Section..
    5. Bozhechkova Alexandra & Trunin Pavel & Knobel Alexander & Firanchuk Alexander & Tsukhlo Sergey & Deryugin Alexander & Lyashok Viktor & Kiyutsevskaya Anna & Arlashkin Igor, 2017. "Monitoring of Russia's Economic Outlook," Monitoring of Russia's Economic Outlook. Trends and Challenges of Socio-Economic Development, Gaidar Institute for Economic Policy, issue 10, pages 1-30, May.
    6. Pantea, Smaranda, 2020. "The effect of minimum wage hikes on employment: Evidence from regional panel data from Romania," Economic Systems, Elsevier, vol. 44(3).

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    More about this item

    Keywords

    minimum wages; unemployment; informal employment; Russia;
    All these keywords.

    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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