The Impact of the Minimum Wage on Working Hours

2020 ◽  
Vol 240 (2-3) ◽  
pp. 233-267 ◽  
Author(s):  
Patrick Burauel ◽  
Marco Caliendo ◽  
Markus M. Grabka ◽  
Cosima Obst ◽  
Malte Preuss ◽  
...  
Keyword(s):  
Social Security ◽  
Minimum Wage ◽  
Working Hours ◽  
Difference In Differences ◽  
Hours Worked ◽  
Social Security Contributions ◽  
Common Trend ◽  
Actual Working ◽  
The Common ◽  
The Impact

AbstractThe present paper analyzes how the statutory minimum wage introduced on January 1, 2015, has affected working hours in Germany up to 2016. The data used come from the Socio-Economic Panel (SOEP), which provides not only contractual working hours but also actual hours worked. Using a difference-in-differences estimation approach, we find a significant and robust reduction in contractual working hours among employees who are subject to social security contributions and earned less than the minimum wage before the introduction. The effect in 2015 is about −5 % and corresponds to a 1.7 hours reduction in average weekly working hours. The effect on actual hours is smaller and estimated less precisely. Extending the analysis until 2016 does not yield significant effects on contractual or actual working hours, while some specifications reject the common trend assumption.

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 Impact of Minimum Wage Changes on Management in the Czech Republic

2016 ◽  
Vol 7 (3) ◽  
pp. 183-189 ◽  
Author(s):  
Natalie Uhrová ◽  
Petr Skalka
Keyword(s):  
Czech Republic ◽  
Social Security ◽  
Minimum Wage ◽  
Employment Contracts ◽  
The Czech Republic ◽  
Social Security Contributions ◽  
Managerial Decisions ◽  
The Impact

Abstract The extent of social security contributions paid by both employers and employees in the Czech Republic is considered one of the biggest problems of the Czech economy. At the same time, the minimum wage in the Czech Republic has been repeatedly changed in recent years and even months, and thus the aim of this paper is to identify and discuss possible consequent changes in managerial decisions in Czech firms that could be examined in further analyses. We suggest the hypothesis that Czech firms are lowering their costs via the substitution of employment agreements for employment contracts in order to avoid social security contributions paid by the employer.

scholarly journals Exploiting the Irish Border to Estimate Minimum Wage Impacts in Northern Ireland

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
Duncan McVicar ◽  
Andrew Park ◽  
Seamus McGuinness
Keyword(s):  
Northern Ireland ◽  
Minimum Wage ◽  
Research Design ◽  
The Other ◽  
Living Wage ◽  
Employment Rate ◽  
Small Decrease ◽  
Difference In Differences ◽  
Hours Worked ◽  
The Uk

AbstractThis paper examines the impacts of the introduction of the UK National Minimum Wage (NMW) in 1999 and the introduction of the UK National Living Wage (NLW) in 2016 in Northern Ireland (NI) on employment and hours. NI is the only part of the UK with a land border where the NMW and NLW cover those working on one side of the border but not those working on the other side of the border (i.e., Republic of Ireland). This discontinuity in minimum wage coverage enables a research design that estimates the impacts of the NMW and NLW on employment and hours worked using difference-in-differences estimation. We find a small decrease in the employment rate of 22–59/64-year-olds in NI, of up to 2% points, in the year following the introduction of the NMW, but no impact on hours worked. We find no clear evidence that the introduction of the NLW impacted either employment or hours worked in NI.

scholarly journals Personal Income Tax and Social Security Coordination in Cross-Border Employment – a Case Study of the Czech Republic and Denmark

2019 ◽  
Vol 21 (1) ◽  
pp. 23-41 ◽  
Author(s):  
Jana Tepperová
Keyword(s):  
Social Security ◽  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
The Czech Republic ◽  
Cross Border ◽  
Social Security Contributions ◽  
The Impact ◽  
The Eu

Neither personal income tax nor social security is harmonised within the EU. Social security systems are coordinated at EU level whereas personal income tax in cross-border situations is governed by respective double tax treaties. In most EU countries, personal income tax and social security contributions are relatively distinct payments. This article examines problems surrounding the interaction between personal income tax and social security contributions on a national and international level based on a case study of cross-border employment between the Czech Republic and Denmark. As the Czech and the Danish systems are designed very differently, the case study allows for clear illustration of the issue at-hand. The aim is to identify the elements influencing the impact of different coordination rules in personal income tax and social security contributions, illustrate and discuss the potential problems of such mismatches between the two payments. The impact on final payments differs, not only due to the different levels of coordination of the payments, but also due to the different designs of the two national systems. Thus, it would be very difficult to address all the scenarios with a one size fits all measure for all the EU Member States that would overcome the differences in this coordination.

How effective are enforcement measures for compliance with the minimum wage? Evidence from Germany

2020 ◽  
pp. 0143831X2096219
Author(s):  
Mario Bossler ◽  
Ursula Jaenichen ◽  
Simeon Schächtele
Keyword(s):  
High Risk ◽  
Minimum Wage ◽  
Minimum Wages ◽  
Difference In Differences ◽  
Hours Worked ◽  
Enhancing Effect ◽  
Employment Data

The extent of non-compliance with minimum wages is heavily debated, but little is known about the effectiveness of enforcement measures. Following the introduction of a national minimum wage in Germany in 2015, employers in a catalogue of industries deemed at high risk of non-compliance were subject to more stringent enforcement requirements, such as an obligation to record hours worked. Using national administrative employment data, in this study the authors exploit the variation in enforcement measures to analyze the effect on non-compliance. As an empirical strategy, they balance jobs from industries with stricter enforcement measures with jobs from other industries and apply difference-in-differences estimations. The evidence points to a small compliance-enhancing effect of the enforcement measures. The gains in compliance are not offset by more pronounced employment losses in those industries subject to stricter enforcement.

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.

Analysing the employment impact of Sunday wage premiums reductions: Implications for minimum wage research

2021 ◽  
pp. 002218562110218
Author(s):  
Raymond Markey ◽  
Martin O’Brien
Keyword(s):  
Empirical Evidence ◽  
Minimum Wage ◽  
Wage Premium ◽  
Difference In Differences ◽  
Hours Worked ◽  
Significant Evidence ◽  
Wage Premiums ◽  
Employment Impact

This article tests the employment impact of recent reductions in Australian wage premiums, or penalty rates, using surveys of 1828 employees and 236 employers in Retail and Hospitality sectors. In applying wage premium reductions for Sunday work, the national regulator, the Fair Work Commission, anticipated improvements in trading hours, employment and hours worked as a consequence. However, the authors found no statistically significant evidence for these predictions. Nor did difference-in-differences methods indicate substitution of workers subject to cuts for those who were exempt. The authors present the first systematic purpose-designed empirical evidence on the employment impact of wage premiums. In the absence of empirical evidence, the regulator had referred substantially to minimum wage research. This study also has implications for minimum wage research, and contributes to it with a novel methodology examining both aggregate hours and employment, comparing those subject to cuts with those not, and surveying both employees and employers.

scholarly journals Do minimum wages improve self-rated health? Evidence from a natural experiment

2021 ◽  
Author(s):  
Lucas Hafner ◽  
Benjamin Lochner
Keyword(s):  
Propensity Score ◽  
Propensity Score Matching ◽  
Minimum Wage ◽  
Survey Data ◽  
Natural Experiment ◽  
Time Pressure ◽  
Working Hours ◽  
Difference In Differences ◽  
Self Rated Health ◽  
Confounding Variables

AbstractWe analyze whether the introduction of the general minimum wage in Germany in 2015 had an effect on workers’ self-rated health. To this end, we use survey data linked to administrative employment records and apply difference-in-differences regressions combined with propensity score matching. This approach enables us to control for a vast set of potential confounding variables. We find a health improving effect among the individuals who were most likely to be affected by the reform. Our results indicate that workers’ improved satisfaction with pay, their reduced working hours, and a reduction in time pressure at work may drive this result.

scholarly journals The Impact on Unemployment of Social Security Contributions: the Empiricial Analysis in Turkey

2017 ◽  
Vol 6 (1) ◽  
pp. 142
Author(s):  
Filiz Giray ◽  
Mehmet Çınar
Keyword(s):  
Social Security ◽  
Unemployment Rate ◽  
Time Series Data ◽  
Oecd Countries ◽  
Series Data ◽  
Macroeconomic Factors ◽  
Social Security Contributions ◽  
Long Run ◽  
The Impact ◽  
Bound Test

Social security contributions are important public incomes after taxes in OECD countries. Beside, social security contributions as a mean of the finance of social security system is a determiner on the main macroeconomic factors such as savings, employment, the cost of employment, the level of shadow economy, economic growth, competitiveness and income inequality. Employment has been important policy goals in Turkey like many OECD countries during recent decades. High unemployment rate is a serious problem for countries. Effecting negatively labor market, high burden of social security contributions causes low level of employment. The aim of this study is to find the relationship between social security contributions and unemployment for Turkey. Therefore, we can evaluate whether reducing social security contributions is a way reducing of unemployment or not. We use time series data during period 1965-2015. The research methodology is based on an analysis of indicators as unemployment rate, social security contributions as percentage of GDPs, the percentage of total tax revenues. Unit root test is non-stationary for social security contributions. On the other hand, unemployment is stationary for related period. The long run relationship between variables was tested by ARDL bound test approach. Based on the sample results, there is a long run cointegration between social security contributions and unemployment rate (both as percentage of GDP and percentage of taxation).

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