Minimum Wages and Labor Market Outcomes: Evidence from the Emerging Economy of Russia

33 Pages Posted: 24 Apr 2013 Last revised: 5 Jul 2013

See all articles by Alexander Muravyev

Alexander Muravyev

Saint Petersburg Branch National Research University Higher School of Economics; Institute for the Study of Labor (IZA)

Aleksey Y. Oshchepkov

National Research University Higher School of Economics

Date Written: April 24, 2013

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.

Keywords: minimum wages, unemployment, informal employment, Russia

JEL Classification: J38, J23

Suggested Citation

Muravyev, Alexander and Oshchepkov, Aleksey Y., Minimum Wages and Labor Market Outcomes: Evidence from the Emerging Economy of Russia (April 24, 2013). Higher School of Economics Research Paper No. WP BRP 29/EC/2013. Available at SSRN: https://ssrn.com/abstract=2255896 or http://dx.doi.org/10.2139/ssrn.2255896

Alexander Muravyev

Saint Petersburg Branch National Research University Higher School of Economics ( email )

Kantemirovskaya str. 3a
St. Petersburg, 194000
Russia

HOME PAGE: http://https://www.hse.ru/en/org/persons/127811036

Institute for the Study of Labor (IZA) ( email )

Schaumburg-Lippe-Str. 5-9
Bonn, D-53113
Germany

HOME PAGE: http://www.iza.org/en/webcontent/index_html

Aleksey Y. Oshchepkov (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya, 20
Moscow, 101000
Russia

Register to save articles to
your library

Register

Paper statistics

Downloads
157
rank
180,168
Abstract Views
892
PlumX Metrics