Russian Migration Liberalization in 2007–2008: Lower Wages and Other Consequences

Sergey Onenko and Sergey Kokovin
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Sergey Onenko: National Research University Higher School of Economics, Saint Petersburg, Russia

HSE Economic Journal, 2017, vol. 21, issue 4, 648-679

Abstract: We explore the noticeable liberalization of Russian labor migration 2007–2008, as a natural experiment. How did it influence the labor market equilibrium and especially the wages of certain categories of Russian employees? We use various data, including remittances from Russia, and restore related increase in official and unofficial labor migration. According to our estimate, the number of migrant workers increased significantly, from 3,3 million in 2006 to 4,2 million (2007) and then to 4,55 million (2008). This did not cause additional unemployment, but did influence wages. We follow Borjas’s method of assessing the impact of natural experiments, and we are interested in equilibrium wage elasticities and the interdependencies among labor groups in Russia. To reveal the elasticity of equilibrium wages responding to 2007–2008 inflow of (mostly unskilled) labor, we run difference-in-difference regressions on RLMS data. For some Russian residents, their wages responded noticeably to new policy. The most affected were pre-established Asian migrants: they lost 14–17,5% wages in response to the 8%–14% increase in the migrant work force. Blue collar ethnic Russians or those with low qualifications lost about 4,5–5,5% of their wages, while the impact on white-collar workers was insignificant. The macro-economic consequences of such liberalization policies for Russia, include losses for some categories of employees, which can be compared with additional GDP generated.

Keywords: international labor; Russia; migration policy; labor mobility; wages; employment (search for similar items in EconPapers)
JEL-codes: J31 J61 J68 (search for similar items in EconPapers)
Date: 2017
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