Effects of Minimum Wage on Unemployment in Russia

In this paper I study the effect of minimum wage on unemployment in Russia. The uniqueness of the Russian economic and political environment in the past decades has created a very interesting environment in the labor market. Russia also lacks current research as even if literature about minimum wage is abundant in developed countries, it is very limited in Russia. We go in depth on the specifics of the Russian minimum wage legislation and labor market, while also analyzing alternatives to minimum wage, recommending minimum wage as the best alternative for Russia. From our obtained data set covering the period from 2007 to 2018 we complete linear panel regression and conclude that unemployment has a significant dependence on the minimum wage policy and that the most vulnerable parts of the population are affected the most. This leads us to our main conclusion: minimum wage policy has a negative effect on unemployment, while having questionable effects on poverty, leading to questions of viability of the policy in the face of new and more promising poverty reducing alternatives.