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The Devil is in the Details: Heterogeneous Effects of the German Minimum Wage on Working Hours and Minijobs

Author

Listed:
  • Mario Bossler
  • Ying Liang
  • Thorsten Schank

Abstract

In 2015, Germany introduced a national minimum wage. While the literature agrees on at most limited negative effects on the overall employment level, we go into detail and analyze the impact on the working hours dimension and on the subset of minijobs. Using data from the German Structure of Earnings Survey in 2010, 2014, and 2018, we find empirical evidence that the minimum wage significantly reduces inequality in hourly and monthly wages. While various theoretical mechanisms suggest a reduction in working hours, these remain unchanged on average. However, minijobbers experience a notable reduction in working hours which can be linked to the specific institutional framework. Regarding employment, the results show no effects for regular jobs, but there is a noteworthy decline in minijobs, driven by transitions to regular employment and non-employment. The transitions in non-employment imply a wage elasticity of employment of -0.1 for minijobs. Our findings highlight that the institutional setting leads to heterogeneous effects of the minimum wage.

Suggested Citation

  • Mario Bossler & Ying Liang & Thorsten Schank, 2024. "The Devil is in the Details: Heterogeneous Effects of the German Minimum Wage on Working Hours and Minijobs," Papers 2403.17206, arXiv.org, revised May 2024.
    • Handle: RePEc:arx:papers:2403.17206
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    Cited by:

    1. Ying Liang, 2024. "Firms' Risk Adjustments to Minimum Wage: Financial Leverage and Labor Share Trade-off," Papers 2408.03659, arXiv.org.
    2. Mario Bossler & Lars Chittka & Thorsten Schank, 2024. "A 22 percent increase in the German minimum wage: nothing crazy!," Papers 2405.12608, arXiv.org, revised Nov 2024.
    3. Bossler Mario, 2025. "Mindestlohnerhöhung; Eine evidenzbasierte Entscheidung," Wirtschaftsdienst, Sciendo, vol. 105(7), pages 483-483.
    4. Balleer Almut & Gehrke Britta & Taskin Ahmet Ali, 2025. "Mindestlohn als Stresstest: Finanzielle Spielräume," Wirtschaftsdienst, Sciendo, vol. 105(10), pages 758-762.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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