The Impact of the Minimum Wage on Initial Labour Market Outcomes

Matthias Umkehrer
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Matthias Umkehrer: Institute for Employment Research (IAB), Nuremberg, Germany ; Mannheim Centre for European Social Research (MZES), University of Mannheim

No 202516, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "In this paper, I study how the introduction of the nationwide minimum wage in Germany affects career outcomes of young workers who have just entered the labour market. The institutional setting, administrative micro data, and predicted minimum wage exposure allow estimating the causal effects of the policy by comparing cohorts initially affected by the minimum wage or not, while accounting for selection into educational track, endogenous timing of entry, changes in cohort composition, and macroeconomic conditions. Affected cohorts showed higher earnings, but no reduced employment. They worked somewhat more hours, were more likely to start careers at larger and higher-paying employers, less likely to perform occupations more exposed to the minimum wage, and less likely to carry out routine manual or menial tasks. According to these results, the minimum wage does not harm the education-to-work transition, but impacts the mix of both firms and occupations in the labour market." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Ausbildungsabsolventen; IAB-Open-Access-Publikation; Auswirkungen; berufliche Mobilität; Berufsanfänger; Berufsverlauf; Integrierte Erwerbsbiografien; junge Erwachsene; Allokation; Lohnhöhe; Lohnpolitik; Mindestlohn; Arbeitskräfte; Tätigkeitsmerkmale; Unternehmensgröße; Arbeitsplatzwahl; Arbeitsplatzwechsel; zweite Schwelle; Arbeitszeit; 2011-2016 (search for similar items in EconPapers)
JEL-codes: J23 J38 J88 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2025-12-18
New Economics Papers: this item is included in nep-eur, nep-inv and nep-lma
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https://doi.org/10.48720/IAB.DP.2516

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:202516

DOI: 10.48720/IAB.DP.2516

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