Building the Minimum Wage: Germany's First Sectoral Minimum Wage and Its Impact on Wages in the Construction Industry

Pia Rattenhuber

No 1111, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: The very first minimum wage in Germany was introduced in 1997 for blue-collar workers in sub-sectors of the construction industry. In the setting of a natural experiment blue-collar workers in neighboring 4-digit-industries and white-collar workers are used as control groups for differences-in-differences-in-differences estimation based on linked employer-employee data. Estimation results reveal a sizable positive average impact on wages in East Germany and no effect in West Germany. Size and significance of effects are not homogeneous across wage regimes (individual vs. collective contracts) and across the distribution suggesting spillover effects to wages where the minimum is not binding.

Keywords: Minimum wage; construction sector; linked employer-employee data; differences-in-differences-in-differences; unconditional quantile regression (search for similar items in EconPapers)
JEL-codes: C21 J18 J38 (search for similar items in EconPapers)
Pages: 37 p.
Date: 2011
New Economics Papers: this item is included in nep-eur and nep-lab
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Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1111

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