IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp16894.html

Using Post-Regularization Distribution Regression to Measure the Effects of a Minimum Wage on Hourly Wages, Hours Worked and Monthly Earnings

Author

Listed:
  • Biewen, Martin

    (University of Tuebingen)

  • Erhardt, Pascal

    (University of Tübingen)

Abstract

We evaluate the distributional effects of a minimum wage introduction based on a data set with a moderate sample size but a large number of potential covariates. Therefore, the selection of relevant control variables at each distributional threshold is crucial to test hypotheses about the impact of the treatment. To this end, we use the post-double selection logistic distribution regression approach proposed by Belloni et al. (2018a), which allows for uniformly valid inference about the target coefficients of our low-dimensional treatment variables across the entire outcome distribution. Our empirical results show that the minimum wage crowded out hourly wages below the minimum threshold, benefitted monthly wages in the lower middle but not the lowest part of the distribution, and did not significantly affect the distribution of hours worked.

Suggested Citation

  • Biewen, Martin & Erhardt, Pascal, 2024. "Using Post-Regularization Distribution Regression to Measure the Effects of a Minimum Wage on Hourly Wages, Hours Worked and Monthly Earnings," IZA Discussion Papers 16894, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp16894
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp16894.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Victor Chernozhukov & Iván Fernández‐Val & Blaise Melly, 2013. "Inference on Counterfactual Distributions," Econometrica, Econometric Society, vol. 81(6), pages 2205-2268, November.
    2. Marco Caliendo & Carsten Schröder & Linda Wittbrodt, 2019. "The Causal Effects of the Minimum Wage Introduction in Germany – An Overview," German Economic Review, Verein für Socialpolitik, vol. 20(3), pages 257-292, August.
    3. Burauel Patrick & Caliendo Marco & Grabka Markus M. & Obst Cosima & Preuss Malte & Schröder Carsten, 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.
    4. Schröder, Carsten & König, Johannes & Fedorets, Alexandra & Goebel, Jan & Grabka, Markus M. & Lüthen, Holger & Metzing, Maria & Schikora, Felicitas & Liebig, Stefan, 2020. "The economic research potentials of the German Socio-Economic Panel study," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 21(3), pages 335-371.
    5. Achim Ahrens & Christian B. Hansen & Mark E. Schaffer, 2020. "lassopack: Model selection and prediction with regularized regression in Stata," Stata Journal, StataCorp LLC, vol. 20(1), pages 176-235, March.
    6. Jonathan Roth, 2022. "Pretest with Caution: Event-Study Estimates after Testing for Parallel Trends," American Economic Review: Insights, American Economic Association, vol. 4(3), pages 305-322, September.
    7. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    8. Mario Bossler & Thorsten Schank, 2023. "Wage Inequality in Germany after the Minimum Wage Introduction," Journal of Labor Economics, University of Chicago Press, vol. 41(3), pages 813-857.
    9. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," ILR Review, Cornell University, ILR School, vol. 46(1), pages 22-37, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marco Caliendo & Alexandra Fedorets & Malte Preuss & Carsten Schröder & Linda Wittbrodt, 2023. "The short- and medium-term distributional effects of the German minimum wage reform," Empirical Economics, Springer, vol. 64(3), pages 1149-1175, March.
    2. Kunaschk, Max, 2024. "The effects of minimum wages on employment and prices—Evidence from the hairdressing sector," Labour Economics, Elsevier, vol. 88(C).
    3. Arindrajit Dube & Attila Lindner, 2024. "Minimum Wages in the 21st Century," RFBerlin Discussion Paper Series 2425, ROCKWOOL Foundation Berlin (RFBerlin).
    4. 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.
    5. 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.
    6. Mario Bossler & Thorsten Schank, 2023. "Wage Inequality in Germany after the Minimum Wage Introduction," Journal of Labor Economics, University of Chicago Press, vol. 41(3), pages 813-857.
    7. Caliendo, Marco & Wittbrodt, Linda, 2022. "Did the minimum wage reduce the gender wage gap in Germany?," Labour Economics, Elsevier, vol. 78(C).
    8. Biewen, Martin & Fitzenberger, Bernd & Rümmele, Marian, 2022. "Using Distribution Regression Difference-in-Differences to Evaluate the Effects of a Minimum Wage Introduction on the Distribution of Hourly Wages and Hours Worked," IZA Discussion Papers 15534, Institute of Labor Economics (IZA).
    9. Bonin Holger & Isphording Ingo E. & Krause-Pilatus Annabelle & Lichter Andreas & Pestel Nico & Rinne Ulf, 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.
    10. Link, Sebastian, 2024. "The price and employment response of firms to the introduction of minimum wages," Journal of Public Economics, Elsevier, vol. 239(C).
    11. Schmid, Ramona, 2022. "Mind the gap: Effects of the national minimum wage on the gender wage gap in Germany," Hohenheim Discussion Papers in Business, Economics and Social Sciences 06-2022, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    12. Wang, Lucy Xiaolu, 2022. "Global drug diffusion and innovation with the medicines patent pool," Journal of Health Economics, Elsevier, vol. 85(C).
    13. Pérez Pérez, Jorge, 2020. "The minimum wage in formal and informal sectors: Evidence from an inflation shock," World Development, Elsevier, vol. 133(C).
    14. Goeyvaerts, Geert, 2023. "Reconstructing cities: Stimulating redevelopment through the tax code," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    15. Demir, Gökay, 2024. "Labor Market Frictions and Spillover Effects from Publicly Announced Sectoral Minimum Wages," IZA Discussion Papers 17510, Institute of Labor Economics (IZA).
    16. Oliveira, Carlos, 2021. "How is the Minimum Wage Shaping the Wage Distribution: Minimum Wage, Spillovers, and Wage Inequality in Portugal," MPRA Paper 112534, University Library of Munich, Germany.
    17. Jonas HJORT & Yukiko SAITO & Yasuka TATEISHI & Linda WU, 2025. "Wage and Employment of Japanese Multinational Enterprises in Vietnam," Discussion papers 25037, Research Institute of Economy, Trade and Industry (RIETI).
    18. Miteva, Daniela A. & Ellis, Edward A. & Ellis, Peter W. & Sills, Erin O. & Griscom, Bronson W. & Rodriguez-Ward, Dawn & Naples, Colette & Uematsu, Claire, 2025. "Community sawmills can save forests: Forest regrowth and avoided deforestation due to vertical integration of wood production in Mexican community forests," Ecological Economics, Elsevier, vol. 236(C).
    19. Stefan Bach & Charlotte Bartels & Theresa Neef, 2025. "The Distribution of National Income in Germany, 1992-2019," SOEPpapers on Multidisciplinary Panel Data Research 1227, DIW Berlin, The German Socio-Economic Panel (SOEP).
    20. Roth, Jonathan & Sant’Anna, Pedro H.C. & Bilinski, Alyssa & Poe, John, 2023. "What’s trending in difference-in-differences? A synthesis of the recent econometrics literature," Journal of Econometrics, Elsevier, vol. 235(2), pages 2218-2244.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp16894. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Fallak (email available below). General contact details of provider: https://edirc.repec.org/data/izaaalu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.