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The Impact of the Minimum Wage on Working Hours

Author

Listed:
  • Burauel Patrick
  • Grabka Markus M.
  • Schröder Carsten

    (DIW Berlin/SOEP, Berlin, Germany)

  • Caliendo Marco

    (University of Potsdam, August-Bebel-Str. 89, 14482Potsdam, Germany)

  • Obst Cosima

    (University of Potsdam, Potsdam, Germany)

  • Preuss Malte

    (Free University Berlin, Berlin, Germany)

Abstract

The present paper analyzes how the statutory minimum wage introduced on January 1, 2015, has affected working hours in Germany up to 2016. The data used come from the Socio-Economic Panel (SOEP), which provides not only contractual working hours but also actual hours worked. Using a difference-in-differences estimation approach, we find a significant and robust reduction in contractual working hours among employees who are subject to social security contributions and earned less than the minimum wage before the introduction. The effect in 2015 is about −5 % and corresponds to a 1.7 hours reduction in average weekly working hours. The effect on actual hours is smaller and estimated less precisely. Extending the analysis until 2016 does not yield significant effects on contractual or actual working hours, while some specifications reject the common trend assumption.

Suggested Citation

  • Burauel Patrick & Grabka Markus M. & Schröder Carsten & Caliendo Marco & Obst Cosima & Preuss Malte, 2020. "The Impact of the Minimum Wage on Working Hours," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 233-267, April.
  • Handle: RePEc:jns:jbstat:v:240:y:2020:i:2-3:p:233-267:n:6
    DOI: 10.1515/jbnst-2018-0081
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    References listed on IDEAS

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    Cited by:

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    2. Bonin, Holger & Pestel, Nico, 2020. "Der Mindestlohn birgt nach wie vor Beschäftigungsrisiken," IZA Standpunkte 98, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    minimum wage; working hours; DiD estimation;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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