The Minimum Wage in Germany: Institutional Setting and a Systematic Review of Key Findings

Dütsch Matthias (), Ohlert Clemens and Baumann Arne
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Dütsch Matthias: Federal Institute for Occupational Safety and Health (BAuA), Nöldnerstr. 40–42, 10317 Berlin, Germany
Ohlert Clemens: Federal Institute for Occupational Safety and Health (BAuA), Nöldnerstr. 40–42, 10317 Berlin, Germany
Baumann Arne: Federal Institute for Occupational Safety and Health (BAuA), Nöldnerstr. 40–42, 10317 Berlin, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2025, vol. 245, issue 1-2, 113-151

Abstract: The introduction of a statutory minimum wage in Germany in 2015 aimed at improving the welfare of low-wage workers but was also accompanied by concerns about distortions in Europe’s largest economy. This paper provides a comprehensive survey of results from the evaluation of the German minimum wage by compiling recent descriptive evidence and a systematic literature review on causal effects through 2022. On 1 October 2022, the minimum wage was raised legislatively by 15 percent to 12 euros per hour, which affected approximately 5.8 million employees and 23 percent of companies. The war in Ukraine and the coronavirus pandemic hit minimum wage workers and minimum wage firms harder than the rest of the economy. The minimum wage thus far had the strongest causal effects directly after its introduction. Hourly wages increased, while working hours decreased, resulting in mixed effects on monthly wages. Overall employment fell slightly, with a decline in marginal employment in particular. Companies’ wage costs increased, and as productivity did not change, profits declined.

Keywords: minimum wage; systematic review; evaluation; Germany (search for similar items in EconPapers)
JEL-codes: J08 J30 J31 J50 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:245:y:2025:i:1-2:p:113-151:n:1003

DOI: 10.1515/jbnst-2023-0038

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