The Short-Term Distributional Effects of the German Minimum Wage Reform

Caliendo, Marco; Fedorets, Alexandra; Preuß, Malte; Schröder, Carsten; Wittbrodt, Linda

doi:10.2139/ssrn.3097364

Cited by 8 publications

(20 citation statements)

References 28 publications

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“…The bite measure derived here is only valid for the other three outcomes, if there are no systematic differences in the regional incidence of part-time and marginal employment and the associated distribution of low wages, relative to the regional incidence of low-wage full-time employment. 13 In fact, Caliendo et al (2017) documented a very strong and stable correlation of the bite measures based on the administrative data used here with a bite measure based on more detailed SOEP data (which includes marginal and part-time employment as well as hours worked. Thus, both issues appear to be negligible in practice.…”

Section: Measurement Of the Bitementioning

confidence: 80%

The Effects of Germany’s Statutory Minimum Wage on Employment and Welfare Dependency

Schmitz

2019

German Economic Review

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In January 2015, Germany introduced a federal, statutory minimum wage of 8.50 € per hour. This study evaluates the effects of this policy on regular and marginal employment and on welfare dependency. Based on the county-level administrative data, this study uses the difference-in-differences technique, exploiting regional variation in the bite of the minimum wage, i.e., the county-specific share of employees paid less than 8.50 € before the introduction of the minimum wage. The minimum wage had a considerable negative effect on marginal employment. There is also some indication that regular employment was slightly reduced. Concerning welfare dependency, the minimum wage reduced the number of working welfare recipients, with some indication that about one half of them left welfare receipt due to the minimum wage.

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Section: Measurement Of the Bitementioning

confidence: 80%

The Effects of Germany’s Statutory Minimum Wage on Employment and Welfare Dependency

Schmitz

2019

German Economic Review

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“…According to estimates derived from contractual wages in the SOEP by Caliendo et al . (), for example, this is the case for about 7% of eligible employees in the first half of 2015. Indications for non‐compliance are also reported in Bachmann et al .…”

Section: Data Sources Implementation Issues and Descriptive Evidencementioning

confidence: 98%

“…The study of Caliendo et al . () suggests that the reform did not improve gross monthly earnings for employees with low‐paid jobs as they experienced a reduction of working hours roughly proportionate to their wage increase . This is also clear in Caliendo et al .…”

Section: Causal Evidencementioning

confidence: 99%

The Causal Effects of the Minimum Wage Introduction in Germany – An Overview

Caliendo

Schröder

Wittbrodt

2019

German Economic Review

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In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the shortrun effects of this new minimum wage on a wide set of socioeconomic outcomes, such as employment and working hours, earnings and wage inequality, dependent and selfemployment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non-compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low-wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialised in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of noncompliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy.

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“…Caliendo et al (2018), exploiting regional variation in the minimum wage bite, conclude that employment adjustment may not have exceeded 80,000 jobs across Germany. One explanation for the absence of major employment effects may be the absence of any discernible effect on reported monthly pay, as suggested in a companion paper (Caliendo et al, 2017). Instead, the authors find a significant working hours reduction, a potential channel to comply with the new law.…”

Section: Employment Effects and Other Margins Of Adjustmentmentioning

confidence: 83%

“…While several studies assess the employment effects of Germany's minimum wage introduction (e.g. Bossler and Gerner, 2019;Caliendo et al, 2017Caliendo et al, , 2018Frentzen et al, 2018;Garloff, 2016), few studies have investigated compliance and enforcement. 1 This is surprising as the labor market effects of a minimum wage depend on enforcement and compliance.…”

Section: Introductionmentioning

confidence: 99%

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

Bossler

Jaenichen

Schächtele

2020

Economic and Industrial Democracy

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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.

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The Short-Term Distributional Effects of the German Minimum Wage Reform

Cited by 8 publications

References 28 publications

The Effects of Germany’s Statutory Minimum Wage on Employment and Welfare Dependency

The Effects of Germany’s Statutory Minimum Wage on Employment and Welfare Dependency

The Causal Effects of the Minimum Wage Introduction in Germany – An Overview

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

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