Testing the Presence of the Hysteresis Effect Unemployment Dynamics in Russia

Andrey V. Zubarev – Head of the Laboratory of Applied Macroeconomic Research of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Valeriia A. Tadei – Junior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The Russian labor market has its own specifics, one of its distinctive features being the gradual decline in unemployment over the past two decades. The coronavirus pandemics and the economic sanctions of 2022 were expected to cause a significant increase in unemployment in Russia. Despite this, the indicators of 2023 turn out to be record low: in January 2023, the share of unemployed officially reached 3.6%. If the absence of the predicted reduction in employment due to sanctions can be explained by the fact that the majority of companies wishing to leave the market continued to work in some way without making significant cuts, the impact of other shocks on the labor market is also interesting to study, since it can contribute to the development of macroeconomic policy measures including the minimization of the consequences of crises.

In this paper, we will consider a model that allows us to determine changes in unemployment rates in the long term in response to various endogenous shocks. The result of the work is the confirmation of the hysteresis effect existence in unemployment dynamics in Russia.

The article was prepared as part of the state assignment research programme of the RANEPA under the President of the Russian Federation.

Key words: hysteresis, unemployment, capital, productivity, VECM.

JEL-codes: C32, E24, J64.