 The price and employment response of firms to the introduction of minimum wagesJournal of Public Economics, 2024, vol. 239, issue C Abstract: This paper studies the price and employment responses of firms to the introduction of a nationwide minimum wage in Germany. Widely throughout the economy, affected firms responded by rapidly and frequently increasing prices without cutting employment. These decisions are strongly interrelated: Firms that increased prices relatively more often also showed a less negative employment response. The relative importance of both margins is associated with product market competition and the specific economic situation firms face when being treated. The empirically strong interdependence suggests that the employment effects of minimum wages may not be properly understood when abstracting from other adjustment margins. Keywords: Minimum wage; Price pass-through; Employment; Interrelation of firms’ choices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:239:y:2024:i:c:s0047272724001725 DOI: 10.1016/j.jpubeco.2024.105236 Access Statistics for this article Journal of Public Economics is currently edited by R. Boadway and J. Poterba More articles in Journal of Public Economics from Elsevier |
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