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On the introduction of minimum wages: empirical relevance of the low wage sector

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  • Marcel Thum
  • Joachim Ragnitz

Abstract

The possible introduction of a minimum wage in Germany hat touched off a heated controversy on the economic effects of such an instrument. Some fear the complete abolition of the low-wage sector. Others see opportunities for wages increases without any significant consequences. Joachim Ragnitz, IWF Halle, and Marcel Thum, Ifo Dresden, examine how many people would be affected by a minimum wage and how many jobs could be lost. According to their estimates, the introduction of a minimum wage of €7.50 in Germany would lead to a reduction of low-skilled employment by 26.7 percent.

Suggested Citation

  • Marcel Thum & Joachim Ragnitz, 2007. "On the introduction of minimum wages: empirical relevance of the low wage sector," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(10), pages 33-35, May.
    • Handle: RePEc:ces:ifosdt:v:60:y:2007:i:10:p:33-35
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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