Reallocation Effects of the Minimum Wage

By Christian Dustmann, A. Lindner, Uta Schönberg, Matthias Umkehrer, P. V. Berge. Quarterly Journal of Economics, 2021

239 citations recorded by the source corpus.

We investigate the wage, employment and reallocation effects of the introduction of a nationwide minimum wage in Germany that affected 15% of all employees. Based on identification designs that exploit variation in exposure across individuals and local areas, we find that the minimum wage raised wages, but did not lower employment. It also led to the reallocation of low-wage workers from smaller to larger, from lower- to higher-paying, and from less- to more-productive establishments. This worker upgrading accounts for up to 17% of the wage increase induced by the minimum wage. Moreover, at the regional level, average establishment quality increased in more affected areas in the years following the introduction of the minimum wage.

Subfields: Economics and Econometrics, Public Administration

View Paper: https://www.semanticscholar.org/paper/32c7b7bd7b132de0048563acfe81bc3b8df3f466

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In Economics and Econometrics

1. Alan Manning
2. M. Alan
3. David H. Autor
4. J. V. van Ommeren
5. Giuseppe Ragusa
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In Public Administration

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Citations in the corpus

• The Elusive Employment Effect of the Minimum Wage (2016, methodology): “An increasing number of papers have sought to estimate the effect on wages and employment: for example, see the summary of the expert commission in Mindestlohn Kommission (2018), or the surveys by Caliendo, Schröder, and Wittbrodt (2019), Bossler and Garner (2019), and Dustmann et al. (2020). Becaus”