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

Alexander Muravyev () and Aleksey Oshchepkov ()
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Alexander Muravyev: Higher School of Economics

Authors registered in the RePEc Author Service: Александр Муравьев ()

No 9589, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 (search for similar items in EconPapers)
JEL-codes: J38 J23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cis and nep-tra
Date: 2015-12
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Published in: IZA Journal of Labor and Development, 2016, 5:6

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