Affiliation:
1. Mario Bossler is Senior Researcher and head of the minimum wages research group at the Institute for Employment Research. Hans-Dieter Gerner is Professor of quantitative methods in business and economics at TH Nuremberg
Abstract
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.
Subject
Management of Technology and Innovation,Organizational Behavior and Human Resource Management,Strategy and Management
Cited by
46 articles.
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