scholarly journals The Impact of the German Minimum Wage on Individual Wages and Monthly Earnings

2020 ◽  
Vol 240 (2-3) ◽  
pp. 201-231 ◽  
Author(s):  
Patrick Burauel ◽  
Marco Caliendo ◽  
Markus M. Grabka ◽  
Cosima Obst ◽  
Malte Preuss ◽  
...  
Keyword(s):  
Minimum Wage ◽  
Wage Growth ◽  
Wage Structure ◽  
Causal Analysis ◽  
Hourly Wage ◽  
Difference In Differences ◽  
Short Run ◽  
Wage Floor ◽  
The Impact

AbstractThis paper evaluates the short-run impact of the introduction of a statutory minimum wage in Germany on the hourly wages and monthly earnings of workers targeted by the reform. We first provide detailed descriptive evidence of changes to the wage structure in particular at the bottom of the distribution and distinguish between trends for regularly employed and marginally employed workers. In the causal analysis, we then employ a differential trend adjusted difference-in-differences (DTADD) strategy to identify the extent to which these changes in wages and earnings can be attributed to the minimum wage introduction. We find that the minimum wage introduction can account for hourly wage growth in the order of roughly 6.5 % or \euro0.45/hour and an increase in monthly earnings of 6.6 % or \euro53/month. Despite finding wage growth at the bottom of the distribution, the paper documents widespread non-compliance with the mandated wage floor of \euro8.50/hour.

scholarly journals Using Occupations to Evaluate the Employment Effects of the German Minimum Wage

2020 ◽  
Vol 240 (2-3) ◽  
pp. 269-294 ◽  
Author(s):  
Martin Friedrich
Keyword(s):  
Minimum Wage ◽  
West Germany ◽  
Difference In Differences ◽  
Regional Effect ◽  
Employment Effects ◽  
Regular Employment ◽  
Short Run ◽  
Wage Floor ◽  
Effect Heterogeneity ◽  
The Impact

AbstractThis paper evaluates the short to medium run employment effects of the 2015 introduction of a statutory minimum wage in Germany. The effect of the policy is recovered from variation in the bite of the minimum wage across occupations using a difference-in-differences estimator. The analysis reveals that the reform only had a small impact on employment and highlights the importance of regional effect heterogeneity. In East Germany, marginal employment decreased by about 18,000 jobs in the short run and 52,000 jobs in the medium run, respectively, due to the minimum wage. In West Germany, no negative employment effects are detectable, but regular employment increased temporarily because of the reform. The medium run estimates include the impact of the first marginal increase of the wage floor from €8.50 to €8.84 in 2017.

Was it worth it? The impact of the German minimum wage on union membership of employees

2021 ◽  
pp. 0143831X2110358
Author(s):  
Simon Ress ◽  
Florian Spohr
Keyword(s):  
Propensity Score ◽  
Social Security ◽  
Labour Market ◽  
Propensity Score Matching ◽  
Minimum Wage ◽  
Trade Union ◽  
Union Membership ◽  
Difference In Differences ◽  
German Trade ◽  
The Impact

This contribution scrutinises how introducing a statutory minimum wage of EUR 8.50 per hour, in January 2015, impacted German employees’ decision with regard to union membership. Based on representative data from the Labour Market and Social Security panel, the study applies a logistic difference-in-differences propensity score matching approach on entries into and withdrawals from unions in the German Trade Union Confederation (Deutscher Gewerkschaftsbund, DGB). The results show no separate effect on withdrawals from or entries into unions after the minimum wage introduction for those employees who benefited financially from it, but a significant increase of entries overall. Thus, unions’ campaign for a minimum wage strengthened their position in total but did not reverse the segmentation of union membership patterns.

scholarly journals The Effect of Minimum Wages on Low-Wage Jobs*

2019 ◽  
Vol 134 (3) ◽  
pp. 1405-1454 ◽  
Author(s):  
Doruk Cengiz ◽  
Arindrajit Dube ◽  
Attila Lindner ◽  
Ben Zipperer
Keyword(s):  
Minimum Wage ◽  
State Level ◽  
The United States ◽  
Minimum Wages ◽  
Wage Distribution ◽  
Employment Effect ◽  
Hourly Wage ◽  
Difference In Differences ◽  
Bottom Part ◽  
Demographic Groups

Abstract We estimate the effect of minimum wages on low-wage jobs using 138 prominent state-level minimum wage changes between 1979 and 2016 in the United States using a difference-in-differences approach. We first estimate the effect of the minimum wage increase on employment changes by wage bins throughout the hourly wage distribution. We then focus on the bottom part of the wage distribution and compare the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it to infer the employment effect. We find that the overall number of low-wage jobs remained essentially unchanged over the five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradeable sectors. We also show how decomposing the overall employment effect by wage bins allows a transparent way of assessing the plausibility of estimates.

Asymmetric Labor Market Reforms: Effects on Wage Growth and Conversion Probability of Fixed-Term Contracts

ILR Review ◽  
2017 ◽  
Vol 71 (3) ◽  
pp. 760-788 ◽  
Author(s):  
Marta Silva ◽  
Luis Filipe Martins ◽  
Helena Lopes
Keyword(s):  
Regime Switching ◽  
Wage Growth ◽  
Employment Protection ◽  
Hourly Wage ◽  
Regime Switching Model ◽  
Switching Model ◽  
Term Contract ◽  
Labor Market Reforms ◽  
The Impact ◽  
Employee Data

The authors investigate the impact of a change in employment protection laws in Portugal that increased the maximum legal duration of fixed-term contracts. They find that this reform led to a reduction in the probability that a worker on a fixed-term contract would be converted to a permanent contract. In addition, those workers who had their contracts converted experienced a significantly higher hourly wage growth at the time of conversion and faced a lower reduction in wage growth during the years in which the changed legislation was in force. Consequently, the implementation of this law led to a 27% increase in the wage-growth differential between the two contracts. The findings are based on an endogenous regime-switching model using rich administrative linked employer–employee data.

Minimum Wages and Supporting Wage Growth

2018 ◽  
Author(s):  
Brian Nolan
Keyword(s):  
Minimum Wage ◽  
Real Wage ◽  
Wage Growth ◽  
Minimum Wages ◽  
Central Question ◽  
The Uk ◽  
Household Incomes ◽  
Rich Countries ◽  
The Impact ◽  
Over Time

This chapter addresses the central question of how governments can seek to underpin real wage growth for working households over time. It looks first at the role that minimum wages can play in supporting wages and household incomes in the middle as well as lower parts of the distribution. This is investigated through a simulation exercise looking at the impact of a substantial increase in the minimum wage in the UK, bringing out the broader lessons to be learned for rich countries. A variety of other routes through which policy might seek to support wage growth are then set out and discussed.

scholarly journals The German Statutory Minimum Wage and Its Effects on Regional Employment and Unemployment

2020 ◽  
Vol 240 (2-3) ◽  
pp. 295-319 ◽  
Author(s):  
Holger Bonin ◽  
Ingo E. Isphording ◽  
Annabelle Krause-Pilatus ◽  
Andreas Lichter ◽  
Nico Pestel ◽  
...  
Keyword(s):  
Labor Markets ◽  
Minimum Wage ◽  
Social Insurance ◽  
Difference In Differences ◽  
Regional Labor Markets ◽  
Regional Labor ◽  
Regular Employment ◽  
Negative Effect ◽  
Proportional Increase ◽  
Wage Floor

AbstractThis paper studies the effects of the introduction of Germany’s statutory minimum wage in 2015 on employment and unemployment on the level of regional labor markets. Using variation in the regional exposure to the new wage floor, we employ a difference-in-differences approach that compares the evolution of employment and unemployment between regions with varying minimum wage bites. Overall, we find no statistically significant effect of the introduction of the German minimum wage on regular employment subject to social insurance, but a statistically significant negative effect on marginal employment. The reduction is not accompanied by a proportional increase in unemployment.

scholarly journals Minimum wage regulation in Switzerland: survey evidence for restaurants in the canton of Neuchâtel

2020 ◽  
Vol 156 (1) ◽  
Author(s):  
Marius Berger ◽  
Bruno Lanz
Keyword(s):  
Supreme Court ◽  
Minimum Wage ◽  
Hourly Wage ◽  
Wage Increase ◽  
Court Ruling ◽  
Supreme Court Ruling ◽  
Swiss Canton ◽  
Wage Regulation ◽  
The Impact

AbstractThis paper provides a first set of results on the impact of minimum wage regulation in Switzerland. We study the effects of an unexpected Supreme Court ruling mandating the Swiss canton of Neuchâtel to enforce a minimum hourly wage of around CHF 20 previously accepted via popular ballot. Given policy discontinuity at cantonal borders, we design a two-wave survey of restaurants to measure wages, employment, workers’ characteristics, and prices and administer it in Neuchâtel as well as in geographically proximate districts of neighboring cantons. Our data covers pre- and post-enforcement outcomes for around 100 restaurants, with information for more than 800 employees distributed over two-survey waves. Our data suggest that the proportion of workers paid below minimum wage went down from 19% to 5% after the introduction of the policy. This decline is compensated by a significant increase of the workforce paid just above minimum wage, and our results suggest that restaurants did not use employment as a margin of adjustment. We also find evidence that the policy affected the distribution of hourly wages up to CHF 6 above the minimum wage, with some workers initially paid above minimum wage experiencing a wage increase.

scholarly journals The impact of minimum wage on unemployment, prices, and growth: A multivariate analysis for Turkey

2019 ◽  
Vol 64 (221) ◽  
pp. 65-83
Author(s):  
Biçerli Kemal ◽  
Merve Kocaman
Keyword(s):  
Error Correction ◽  
Minimum Wage ◽  
Causality Test ◽  
Producer Price ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Turkish Economy ◽  
Short Run ◽  
The Impact

The aim of this study is to research the impact of minimum wage on unemployment, prices, and growth for the Turkish economy. The data used is monthly and covers the period from January 2005 to March 2017. The producer price index represents prices and the industrial production index represents growth. The Autoregressive Distributed Lag (ARDL) model is used to see the effect of the minimum wage on these variables. An error-correction based Granger causality test is then conducted to see short-run and long-run causalities. The bounds test yields evidence of a long-run relationship between variables. The obtained ARDL results also show that while the minimum wage has a statistically significant effect on unemployment and prices, it does not have a statistically significant effect on production. While there is short-run causality from minimum wage to prices only, the obtained significant error correction terms indicate long-run causality for all of the variables. Consequently, the minimum wage plays a significant role in increasing prices and the number of unemployed people in Turkey.

scholarly journals Do Lower Minimum Wages for Young Workers Raise Their Employment? Evidence from a Danish Discontinuity

2020 ◽  
Vol 102 (2) ◽  
pp. 339-354 ◽  
Author(s):  
Claus Thustrup Kreiner ◽  
Daniel Reck ◽  
Peer Ebbesen Skov
Keyword(s):  
Minimum Wage ◽  
Minimum Wages ◽  
Youth Employment ◽  
Hourly Wage ◽  
Young Workers ◽  
Policy Changes ◽  
Danish Population ◽  
Total Input ◽  
Wage Payment ◽  
The Impact

We estimate the impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18, using monthly payroll records for the Danish population. The hourly wage jumps by 40% at the discontinuity. Employment falls by 33%, and total input of hours decreases by 45%, leaving the aggregate wage payment almost unchanged. We show theoretically how the discontinuity may be exploited to evaluate policy changes. The relevant elasticity for evaluating the effect on youth employment of changes in their minimum wage is in the range 0.6 to 1.1.

The Effects of Minimum Wages on the Distribution of Changes in Regional Employment in the United States

1979 ◽  
Vol 11 (4) ◽  
pp. 381-392
Author(s):  
J W Mixon ◽  
N D Uri
Keyword(s):  
United States ◽  
Minimum Wage ◽  
Seasonal Cycle ◽  
Work Force ◽  
The United States ◽  
Minimum Wages ◽  
Employment Patterns ◽  
Short Run ◽  
Minimum Wage Legislation ◽  
The Impact

This study investigates the manner in which increases in the minimum wage have altered the distribution of employment and the sensitivity to short-run changes of employment among states in the United States. Further, by focusing on the distribution of employment and on how that distribution changes over the seasonal cycle, estimates of some aspects of the impact of the minimum wage that have not heretofore been analyzed have been developed. The evidence indicates that increases in the minimum wage over the period 1947–1976 have had a significant impact on employment patterns. Minimum-wage legislation has had the effect of decreasing the share of projected employment and increasing vulnerability to cyclical changes in employment for the group of workers most marginal to the work force—low-wage employees.

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