Impact of the number of employees on wages and housing prices in Russian regions

Abstract

The article examines the impact of changes in the number of employees on wages and housing prices in Russian regions. According to the local labor market model higher nominal wages in a particular region can attract workers from other regions. Due to the limited supply of housing an increase in the number of people employed in a certain area leads to an increase in demand for housing and an increase in prices for it, which can cause workers to lose in terms of real wages. In the presented work we tried to answer the question of whether the change in the number of employees in the region affects wages and housing prices in the subjects of the Russian Federation. The estimates were carried out on aggregated regional Rosstat data using panel models with fixed and spatial effects (SEM and SAR models). The study showed that there are spatial correlations both between regional labor markets and between local housing markets. Changes in the number of employees in the region make a significant positive impact on housing prices and a significant negative impact on real wages. In terms of significance and direction of impact all the evaluated models are similar to each other. The results of the analysis can be used to carry out social, regional and migration policies.