Gendered Effects of the Minimum Wage

Luke Haywood ()
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Luke Haywood: Mercator Research Institute on Global Commons and Climate Change (MCC Berlin) and DIWBerlin

No 2023/450, UB School of Economics Working Papers from University of Barcelona School of Economics

Abstract: Women are more likely to work in jobs with low hours than men. Low-hour jobs are associated with lower hourly wages and are more likely impacted by minimum wages that set a floor on hourly wages. We document that the first German minimum wage significantly increased women's transition towards jobs with higher weekly hours. We construct and estimate an equilibrium search model with demographic and firm productivity heterogeneity. The model replicates observed gender gaps in employment, hours and wage and the positive relationship between hours and hourly wages. We implement the minimum wage in our model with a penalty to address non-compliance. Based on our model, the minimum wage primarily reduces the gender income gap through the gender wage gap. At its 2022 level, the German minimum wage reduces the gender employment and hours gap due to an upward reallocation effect, resulting in women's increased participation in higher-hour jobs with lower separation rates. The upward reallocation effect is the strongest for women with children and varies by marital state and spousal income. While the minimum wage only modestly discourages firms from posting jobs, it shifts job offers toward full-time positions.

Keywords: Minimum wage; gender gaps; equilibrium job posting; hour requirement. (search for similar items in EconPapers)
JEL-codes: E24 E64 J08 J16 J31 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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