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Balance after Five Years: What Has the Legal Minimum Wage Achieved?

Author

Listed:
  • Andreas Knabe
  • Ronnie Schöb
  • Marcel Thum
  • Bruttel,Oliver
  • Benjamin Börschlein
  • Bossler Mario
  • Felix Pakleppa
  • Holger Bonin
  • Nico Pestel
  • Alexandra Fedorets
  • Marco Caliendo

Abstract

Since January 1, 2015, a statutory minimum wage has been in force throughout Germany. What employment effects can be observed after five years? Did the minimum wage cost jobs, and how much work volume did the minimum wage displace? What adjustment channels have companies used to avoid redundancies? Has it been possible to reduce the number of transfer recipients and the risk of poverty? Will the coronavirus crisis prove to be a stress test for the minimum wage? Our authors discuss the answers to these questions.

Suggested Citation

  • Andreas Knabe & Ronnie Schöb & Marcel Thum & Bruttel,Oliver & Benjamin Börschlein & Bossler Mario & Felix Pakleppa & Holger Bonin & Nico Pestel & Alexandra Fedorets & Marco Caliendo, 2020. "Balance after Five Years: What Has the Legal Minimum Wage Achieved?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(04), pages 03-28, April.
    • Handle: RePEc:ces:ifosdt:v:73:y:2020:i:04:p:03-28
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    References listed on IDEAS

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    1. Bonin Holger & Isphording Ingo E. & Krause-Pilatus Annabelle & Pestel Nico & Rinne Ulf & Lichter Andreas, 2020. "The German Statutory Minimum Wage and Its Effects on Regional Employment and Unemployment," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 295-319, April.
    2. Bonin, Holger & Isphording, Ingo E. & Krause-Pilatus, Annabelle & Lichter, Andreas & Pestel, Nico & Rinne, Ulf & al., et, 2018. "Auswirkungen des gesetzlichen Mindestlohns auf Beschäftigung, Arbeitszeit und Arbeitslosigkeit," IZA Research Reports 83, Institute of Labor Economics (IZA).
    3. Caliendo, Marco & Fedorets, Alexandra & Preuss, Malte & Schröder, Carsten & Wittbrodt, Linda, 2018. "The short-run employment effects of the German minimum wage reform," Labour Economics, Elsevier, vol. 53(C), pages 46-62.
    4. Sebastian Link, 2019. "The Price and Employment Response of Firms to the Introduction of Minimum Wages," CESifo Working Paper Series 7575, CESifo.
    5. Sebastian Schmitz, 2019. "The Effects of Germany's Statutory Minimum Wage on Employment and Welfare Dependency," German Economic Review, Verein für Socialpolitik, vol. 20(3), pages 330-355, August.
    6. Gabriel Ahlfeldt & Duncan Roth & Tobias Seidel, 2018. "The Regional Effects of a National Minimum Wage," CESifo Working Paper Series 6924, CESifo.
    7. Ahlfeldt, Gabriel M. & Roth, Duncan & Seidel, Tobias, 2018. "The regional effects of Germany’s national minimum wage," Economics Letters, Elsevier, vol. 172(C), pages 127-130.
    8. Ahlfeldt, Gabriel & Roth, Duncan & Seidel, Tobias, 2018. "The regional effects of Germany’s national minimum wage," CEPR Discussion Papers 13005, C.E.P.R. Discussion Papers.
    9. Alfred Garloff, 2019. "Did the German Minimum Wage Reform Influence (Un)employment Growth in 2015? Evidence from Regional Data," German Economic Review, Verein für Socialpolitik, vol. 20(3), pages 356-381, August.
    10. Marco Caliendo & Alexandra Fedorets & Malte Preuss & Carsten Schröder & Linda Wittbrodt, 2017. "The Short-Term Distributional Effects of the German Minimum Wage Reform," SOEPpapers on Multidisciplinary Panel Data Research 948, DIW Berlin, The German Socio-Economic Panel (SOEP).
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    Cited by:

    1. Ademmer, Martin & Boysen-Hogrefe, Jens & Groll, Dominik & Jannsen, Nils & Kooths, Stefan & Meuchelböck, Saskia & Sonnenberg, Nils, 2022. "Deutsche Wirtschaft im Frühjahr 2022. Erholung gefährdet - Preisdruck hoch [German Economy Spring 2022. Recovery at risk - Soaring Inflation]," Kieler Konjunkturberichte 89, Kiel Institute for the World Economy (IfW Kiel).
    2. Groll, Dominik, 2022. "Zur Mindestlohnerhöhung auf 12 Euro," Kiel Insight 2022.04, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    Mindestlohn; Lohnpolitik; Arbeitsmarkt; Beschäftigungseffekt; Unternehmen;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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