Employment Effects of the New German Minimum Wage: Evidence from Establishment-Level Microdata

By Mario Bossler, H. Gerner. ILR Review, 2019

119 citations recorded by the source corpus.

The authors present the first evidence on the consequences of the new statutory minimum wage in Germany, which was implemented on January 1, 2015. Using the IAB Establishment Panel, they identify employment effects from variation in the extent that establishments are affected by the minimum wage. A difference-in-differences estimation reveals an increase in average wages between 3.8% and 6.3% and an employment loss by approximately 1.7% in establishments affected by the minimum wage. These estimates imply a labor demand elasticity with respect to wages ranging between −0.2 and −0.4. The authors also observe a transitory reduction of the working hours in the first year after the introduction and that the employment effect seems mostly driven by a reduction in hires rather than by an increase in layoffs.

Subfields: Economics and Econometrics, General Health Professions, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/b78608d1cd9ee5f7d3f31d0b6d6715ae08594cf1

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Citations in the corpus

Monopsony in Labor Markets: A Review (2020, background): “The employment effect of the minimum wage remains a contentious issue in the United States and other countries (see, for example, Bossler and Gerner 2019; Caliendo, Schröder, and Wittbrodt 2019; and Dustmann at al.”
Reallocation Effects of the Minimum Wage (2021, result): “Our findings suggests that the small negative employment effects uncovered by Bossler and Gerner (2020) at the establishment 3.”