Spatial Implications of Minimum Wages

Thiess Büttner () and Alexander Ebertz
Authors registered in the RePEc Author Service: Thiess Buettner () and Hans-Werner Sinn ()

No Ifo Working Paper No. 66, Ifo Working Paper Series from Ifo Institute for Economic Research at the University of Munich

Abstract: This paper addresses possible consequences of a minimum wage in a spatial context. An empirical analysis utilizing German data shows that a signifcant spatial wage structure exists and that, as a consequence, the share of workers earning wages below a minimum wage will be particularly high in rural counties even if we control for educational and occupational differences. A theoretical analysis discusses the implications for the spatial structure of the economy and shows that while the wages in the countryside will be affected positively, wages will decline in the city, where employment and population rise. Workers in the city will further suffer from an increase in housing costs. This supports concerns that urban poverty might increase as a result of the introduction of a minimum wage.

Keywords: Minimum Wages; Urban Poverty; Spatial Wage Structure; Mobility; Economies of Agglomeration (search for similar items in EconPapers)
JEL-codes: J30 J60 R12 (search for similar items in EconPapers)
Date: 2009
View list of references

Downloads: (external link)
http://www.cesifo-group.de/DocDL/IfoWorkingPaper-66.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ces:ifowps:_66

Access Statistics for this paper

More papers in Ifo Working Paper Series from Ifo Institute for Economic Research at the University of Munich
Address: Poschingerstrasse 5, 81679 Munich
Contact information at EDIRC.
Series data maintained by Julio Saavedra ().