Using Occupations to Evaluate the Employment Effects of the German Minimum Wage

Friedrich Martin ()
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Friedrich Martin: GradAB/PASS, Institute for Employment Research (IAB),Regensburger Str. 100, Nuremberg90478, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2020, vol. 240, issue 2-3, 269-294

Abstract: This paper evaluates the short to medium run employment effects of the 2015 introduction of a statutory minimum wage in Germany. The effect of the policy is recovered from variation in the bite of the minimum wage across occupations using a difference-in-differences estimator. The analysis reveals that the reform only had a small impact on employment and highlights the importance of regional effect heterogeneity. In East Germany, marginal employment decreased by about 18,000 jobs in the short run and 52,000 jobs in the medium run, respectively, due to the minimum wage. In West Germany, no negative employment effects are detectable, but regular employment increased temporarily because of the reform. The medium run estimates include the impact of the first marginal increase of the wage floor from €8.50 to €8.84 in 2017.

Keywords: minimum wage; employment; jobs; occupations (search for similar items in EconPapers)
JEL-codes: C23 J23 J31 J38 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:240:y:2020:i:2-3:p:269-294:n:5

DOI: 10.1515/jbnst-2018-0085

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