Economic Effects of Minimum Wage

Student: Evstigneeva Evgeniia

Educational Programme: Economics (Bachelor)

Year of Graduation: 2017

Recently, the question about the impact of the minimum wage on the economic situation is one of the most controversial issues. In Russia, a minimum wage has been introduced to solve the problem of poverty and the regulation of labor prices in the market. However, numerous studies have found negative consequences for the country's economy. The purpose of this study is to identify the dependence of the unemployment rate and employment on the minimum wage for different demographic groups by region in Russia. Using econometric analysis on the basis of a set of data from 2001 to 2014, the paper examines the impact of an increase in the minimum wage on unemployment and employment for young people, low-educated people and general levels in Russia. This study proves an increase in unemployment and a decrease in employment due to an increase of the minimum wage in the regions. In addition, the opposite effects were found for young and low-educated people.

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