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

Publikation: Bidrag til tidsskriftTidsskriftartikelfagfællebedømt

  • Patrick Burauel
  • Marco Caliendo
  • Markus M. Grabka
  • Cosima Obst
  • Malte Preuss
  • Carsten Schröder
  • Cortnie Anne Shupe
This 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 €0.45/hour and an increase in monthly earnings of 6.6 % or €53/month. Despite finding wage growth at the bottom of the distribution, the paper documents widespread non-compliance with the mandated wage floor of €8.50/hour.
OriginalsprogEngelsk
TidsskriftJahrbücher für Nationalökonomie und Statistik
Vol/bind240
Udgave nummer2-3
Sider (fra-til)201-231
ISSN0021-4027
DOI
StatusUdgivet - 19 jun. 2019

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