Minimum wages in German industries—what does the evidence tell us so far?

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Abstract Since the effects of a minimum wage on wages and employment are depending on a bunch of factors and are by no means determined theoretically in an unambiguous way, empirical analysis is required. German studies on the effects of minimum wages in the past often did not meet international methodological standards. International minimum wage research today is typically based on micro data analysis. Hereby the development of economic variables before and after the introduction of a minimum wage for a treatment group is compared to that of a control group (difference-in-difference approach). A corresponding method is applied in a series of recent German studies aiming at the evaluation of the introduction of the minimum wage in a number of industrial branches. Through these studies minimum wage research in Germany has made substantial progress and caught up to standards of the international literature. However, there are still open methodological questions that are discussed in this article. A central finding from the existing minimum wage studies in Germany is that disemployment effects are hard to find. By contrast, wage effects can be identified in most studies, especially in the eastern part of Germany. Terms of use: Documents in Keywords Minimum wages

Does the German Minimum Wage Help Low Income Households?: Evidence from Observed Outcomes and the Simulation of Potential Effects

“…Neumark and Wascher, 2008;Neumark et al, 2014;Allegretto et al, 2017;or Neumark, 2018). Besides evaluations of sectoral minimum wages (Möller, 2012), several papers for Germany do not find significant effects, or only small negative short-run reductions in employment (Bellmann et al, 2016;Bossler and Gerner, 2016;vom Berge et al, 2016;vom Berge and Frings, 2017;Bruttel et al, 2018;Caliendo et al, 2018;Ahlfeldt et al, 2018). Some marginal jobs have been transformed into regular employment (Garloff, 2017;Bachmann et al, 2017;vom Berge and Weber, 2017).…”

“…Examples are, among others, the main construction trade, the roofing sector, or commercial care services. 3 The sector-specific minimum wages lie above the federal minimum wage or were increased after the minimum wage reform (Amlinger et al, 2016;Möller, 2012). The federal minimum wage is thus not binding in those sectors.…”

The making of the German minimum wage: a case study of institutional change

“…In seven of these eight studies, the employment effects were estimated using difference‐in‐differences methods. All the control group estimates came to the conclusion that the industry‐level minimum wages, some of which were relatively high, had had no negative employment effects (Bosch and Weinkopf, ; Möller, ). On the basis of this new evidence and the dissemination of the more recent research on minimum wages from the United States and the UK by non‐mainstream researchers, the conservative labour minister and then the Chancellor herself declared themselves in favour of further minimum wages at industry level.…”

Giving the International Scientific Community Access to German Labor Market Data: A Success Story

“…Another important field is to monitor and evaluate the effects of new labor market regulations or institutions. One example is the minimum wage that was first implemented in the German construction industry in 1997 and later extended to other sectors (König and Möller 2009;Möller 2012;Aretz et al 2013). The various effects of the general statutory minimum wage that was implemented on 1 January 2015 are currently being analyzed in several projects based on RDC-IAB data.…”