Spatial Implications of Minimum Wages
AbstractThis paper addresses possible consequences of a minimum wage in a spatial context. An empirical analysis utilizing German data shows that a signifcant spatial wage structure exists and that, as a consequence, the share of workers earning wages below a minimum wage will be particularly high in rural counties even if we control for educational and occupational differences. A theoretical analysis discusses the implications for the spatial structure of the economy and shows that while the wages in the countryside will be affected positively, wages will decline in the city, where employment and population rise. Workers in the city will further suffer from an increase in housing costs. This supports concerns that urban poverty might increase as a result of the introduction of a minimum wage.
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Bibliographic InfoPaper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 66.
Date of creation: 2009
Date of revision:
Minimum Wages; Urban Poverty; Spatial Wage Structure; Mobility; Economies of Agglomeration;
Other versions of this item:
- Thiess Buettner & Alexander Ebertz, 2009. "Spatial Implications of Minimum Wages," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 229(2-3), pages 292-312, June.
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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