IDEAS home Printed from https://ideas.repec.org/a/nos/voprec/y2024id4657.html
   My bibliography  Save this article

Scenario modeling of increasing the minimum wage: estimating impact on monetary poverty

Author

Listed:
  • E. A. Gorina
  • S. A. Ter-Akopov
  • A. А. Chervyakova
  • S. S. Biryukova
  • O. V. Sinyavskaya

Abstract

The article presents scenario modeling of the effects of an increase in the minimum wage on the population income and the poverty rate and gap in Russia. The authors use data from the Rosstat Survey of Population Income and Participation in Social Programs and consider three scenarios for increasing the minimum wage ranging from 6.3% (actual increase in 2023) to a radical increase to a value corresponding to 1.5 subsistence levels of a working-age citizen. The estimates accounting for a number of assumptions about the reaction of the labor market show that an increase in the minimum wage in a given range leads to a weak or moderate increase in per capita income, poverty gap, and poverty rate. Even within the radical scenario, the reduction in poverty rate ranges from –16% to –19% of the initial percentage, and the reduction in the total income deficit ranges from –12% to –17%. The main factors limiting the impact of increasing the minimum wage on the monetary poverty rate are related to the structure of Russian households. On the one hand, two thirds of Russian workers with the lowest wages live in households that are not poor by formal criteria. On the other hand, individual earnings above the poverty line may not be sufficient to overcome the poverty of the entire household if it includes minor children.

Suggested Citation

  • E. A. Gorina & S. A. Ter-Akopov & A. А. Chervyakova & S. S. Biryukova & O. V. Sinyavskaya, 2024. "Scenario modeling of increasing the minimum wage: estimating impact on monetary poverty," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 6.
  • Handle: RePEc:nos:voprec:y:2024:id:4657
    DOI: 10.32609/0042-8736-2024-6-133-149
    as

    Download full text from publisher

    File URL: https://www.vopreco.ru/jour/article/viewFile/4657/2673
    Download Restriction: no

    File URL: https://libkey.io/10.32609/0042-8736-2024-6-133-149?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nos:voprec:y:2024:id:4657. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: NEICON (email available below). General contact details of provider: https://www.vopreco.ru .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.