Minimum Wages as a Barrier to Entry – Evidence from Germany
This study analyses employers‘ support for the introduction of industry-specific minimum wages as a cost-raising strategy in order to deter market entry. Using a unique data set consisting of 800 firms in the German service sector, we find some evidence that high-productivity employers support minimum wages. We further show that minimum wage support is higher in industries and regions with low barriers to entry. This is particularly the case in East Germany, where the perceived threat of low-wage competition from Central and Eastern European countries is relatively high. In addition, firms paying collectively agreed wages are more strongly in favour of minimum wages if union coverage is low and the mark-up of union wage rates is high.
|Date of creation:||Apr 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Hohenzollernstraße 1-3, 45128 Essen|
Web page: http://www.rwi-essen.de/
More information through EDIRC
|Order Information:||Web: http://www.rwi-essen.de/publikationen/|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, March.
- Garnsey, Elizabeth, 1998. "A Theory of the Early Growth of the Firm," Industrial and Corporate Change, Oxford University Press, vol. 7(3), pages 523-56, September.
- Saint-Paul, Gilles, 2005.
"Making Sense of Bolkestein-Bashing: Trade Liberalization under Segmented Labor Markets,"
IZA Discussion Papers
1618, Institute for the Study of Labor (IZA).
- Saint-Paul, Gilles, 2007. "Making sense of Bolkestein-bashing: Trade liberalization under segmented labor markets," Journal of International Economics, Elsevier, vol. 73(1), pages 152-174, September.
- Saint-Paul, Gilles, 2005. "Making Sense of Bolkestein-Bashing: Trade Liberalization Under Segmented Labour Markets," CEPR Discussion Papers 5100, C.E.P.R. Discussion Papers.
- Saint-Paul, Gilles, 2005. "Making Sense of Bolkestein-Bashing: Trade Liberalization under Segmented Labor Markets," IDEI Working Papers 353, Institut d'Économie Industrielle (IDEI), Toulouse.
- Haucap, Justus & Pauly, Uwe & Wey, Christian, 2001.
"Collective wage setting when wages are generally binding An antitrust perspective,"
International Review of Law and Economics,
Elsevier, vol. 21(3), pages 287-307, September.
- Justus Haucap & Uwe Pauly & Christian Wey, 2000. "Collective Wage Setting When Wages Are Generally Binding: An Antitrust Perspective," CIG Working Papers FS IV 00-01, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Thomas Kiessl & Carsten Pohl & Heinz Schmalholz, 2006. "Ostdeutsche Unternehmen betrachten EU-Dienstleistungsrichtlinie mit Skepsis," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 13(01), pages 15-26, 02.
- Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010.
"Rising wage inequality, the decline of collective bargaining, and the gender wage gap,"
ZEW Discussion Papers
10-014, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
- Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising Wage Inequality, the Decline of Collective Bargaining, and the Gender Wage Gap," IZA Discussion Papers 4911, Institute for the Study of Labor (IZA).
- Oliver E. Williamson, 1968. "Wage Rates as a Barrier to Entry: The Pennington Case in Perspective," The Quarterly Journal of Economics, Oxford University Press, vol. 82(1), pages 85-116.
- Shingo Ishiguro & Laixun Zhao, 2009. "Raising Wages To Deter Entry Into Unionized Markets," The Japanese Economic Review, Japanese Economic Association, vol. 60(4), pages 435-445.
- Braun, Sebastian, 2011. "Unionisation structures, productivity and firm performance: New insights from a heterogeneous firm model," Labour Economics, Elsevier, vol. 18(1), pages 120-129, January.
- Gernot Nerb, 2006. "Mögliche Auswirkungen der geplanten EU-Dienstleistungsrichtlinie auf die Wirtschaft Deutschlands," Ifo Schnelldienst, Ifo Institute – Leibniz Institute for Economic Research at the University of Munich, vol. 59(05), pages 19-24, 03.
- Sven Heitzler & Christian Wey, 2010. "Raising Rivals' Fixed (Labor) Costs: The Deutsche Post Case," Discussion Papers of DIW Berlin 1008, DIW Berlin, German Institute for Economic Research.
When requesting a correction, please mention this item's handle: RePEc:rwi:repape:0329. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Weiler)
If references are entirely missing, you can add them using this form.