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Employment effects of the new German minimum wage : evidence from establishment-level micro data

Author

Listed:
  • Bossler, Mario

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Gerner, Hans-Dieter

    (Institute for Employment Research (IAB), Nuremberg, Germany)

Abstract

"In Germany a new statutory minimum wage of EURO 8.50 per hour of work was introduced on 1 January 2015. We identify employment effects using variation in the establishment-level affectedness. The data allow us to address anticipatory wage adjustments as well as spillover effects within and across workplaces. Difference-indifferences estimation reveals an increase in average wages by 4.8 percent and an employment reduction by about 1.9 percent in affected establishments. These estimates imply an employment elasticity with respect to wages of about -0.3. Looking at the associated labor flows, the employment effect seems mostly driven by a reduction in hires but also by a small increase in separations. Moreover, the employment neutral turnover rate decreases. When analyzing alternative adjustment margins, we observe a reduction in the typical contracted working hours but no effects on freelance employment." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Bossler, Mario & Gerner, Hans-Dieter, 2016. "Employment effects of the new German minimum wage : evidence from establishment-level micro data," IAB-Discussion Paper 201610, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201610
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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Beschäftigerverhalten ; Beschäftigungseffekte ; Beschäftigungsform ; IAB-Betriebspanel ; Lohnhöhe ; Mindestlohn ; Personalanpassung ; Selbständige ; Arbeitszeit ; 2014-2015;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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