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The German Minimum Wage: Effects on Productivity, Profitability, and Investments

Mario Bossler (), Gürtzgen Nicole (), Betzl Ute, Feist Lisa () and Benjamin Lochner
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Feist Lisa: Institut für Arbeitsmarkt- und Berufsforschung, Regensburger Str. 100, Nürnberg, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2020, vol. 240, issue 2-3, 321-350

Abstract: In this article, we analyze the effects of the introduction of the German minimum wage using difference-in-differences estimations applied to the IAB Establishment Panel. The treatment effects on the treated establishments show a significant increase in personnel costs. When we analyze the effects of the minimum wage on the net sales of intermediates, we observe a reduction, which is fully explained by the increase in wage costs induced by the minimum wage. The results do not point to effects on establishment-level productivity or capital investments. Looking at investments in human capital, we do not observe any effects on apprenticeship offers or the placement of apprentices. If anything, the results point at a slight reduction in the provision of further training.

Keywords: minimum wage; productivity; profitability; training (search for similar items in EconPapers)
JEL-codes: C23 J38 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1515/jbnst-2018-0074

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