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

26 Pages Posted: 11 Jan 2016

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

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.

Keywords: minimum wages, unemployment, informal employment, Russia

JEL Classification: J38, J23

Suggested Citation

Muravyev, Alexander and Oshchepkov, Aleksey Y., The Effect of Doubling the Minimum Wage on Employment: Evidence from Russia. IZA Discussion Paper No. 9589, Available at SSRN: https://ssrn.com/abstract=2713009 or http://dx.doi.org/10.2139/ssrn.2713009

Alexander Muravyev (Contact Author)

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

National Research University Higher School of Economics ( email )

Myasnitskaya, 20
Moscow, 101000
Russia

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