The Employment Effect of Industry- Specific, Collectively Bargained Minimum Wages

Hanna Frings

German Economic Review, 2013, vol. 14, issue 3, 258-281

Abstract: This study estimates the employment effects of industry-specific, collectively bargained minimum wages in Germany for two occupations associated with the construction sector. I propose a truly exogenous control group in contrast to the control group design used in the literature. Further, a difference-in-differences-in-differences estimator is presented as a robustness test for occupation-specific and/or industry-specific, time-varying, unobserved heterogeneity. I do not find a significantly negative employment effect, even though the minimum wage is binding in (East) Germany. Possible explanations include substitution effects, non-compliance and models of monopsonic competition.

Keywords: Minimum wage; monopsonic competition; difference-in-differences (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1111/geer.12009

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