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Unemployment effects of the German minimum wage in an equilibrium job search model

Maximilian Blömer, Nicole Guertzgen (), Laura Pohlan (), Holger Stichnoth () and Gerard J. van den Berg

No 18-032, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We structurally estimate an equilibrium search model using German administrative data and use this for counterfactual analyses of a uniform minimum wage. The model with worker and firm heterogeneity does not restrict the sign of employment effects a priori and allows for different job offer arrival rates for the employed and the unemployed. We find that unemployment is a non-monotonic function of the minimum wage level. Effects differ strongly by labour market segment. Cross-segment variation of the estimated effects is mostly driven by firm productivity levels rather than by search frictions or the opportunity cost of employment.

Keywords: wages; job durations; work; employment; productivity; structural estimation (search for similar items in EconPapers)
JEL-codes: J31 J51 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-lab
Date: 2018
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Related works:
Working Paper: Unemployment Effects of the German Minimum Wage in an Equilibrium Job Search Model (2018) Downloads
Working Paper: Estimating an Equilibrium Job Search Model for the German Labour Market (2016)
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