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Research papers on The minimum wage and jobs

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  1. Employment Effects of the New German Minimum Wage: Evidence from Establishment-Level Microdata

    Mario Bossler, H. Gerner · 2019 · ILR Review · 138 citations

    The authors present the first evidence on the consequences of the new statutory minimum wage in Germany, which was implemented on January 1, 2015. Using the IAB Establishment Panel, they identify employment effects from variation in the extent that establishments are affected by the minimum wage. A difference-in-differences estimation reveals an increase in average wages between 3.8% and 6.3% and an employment loss by approximately 1.7% in establishments affected by the minimum wage. These estimates imply a labor demand elasticity with respect to wages ranging between −0.2 and −0.4. The authors also observe a transitory reduction of the working hours in the first year after the introduction

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  2. Minimum Wage Employment Effects and Labor Market Concentration

    José Azar, Emiliano Huet-Vaughn, I. Marinescu, et al. · 2019 · SSRN Electronic Journal · 128 citations

    Why is the employment effect of the minimum wage frequently found to be close to zero? Theory tells us that when wages are below marginal productivity, as with monopsony, employers are able to increase wages without laying off workers, but systematic evidence directly supporting this explanation is lacking. In this paper, we provide empirical support for the monopsony explanation by studying a key low-wage retail sector and using data on labor market concentration that covers the entirety of the United States with fine spatial variation at the occupation-level. We find that more concentrated labor markets – where wages are more likely to be below marginal productivity – experience significan

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  3. The short-run employment effects of the German minimum wage reform

    Marco Caliendo, Alexandra Fedorets, Malte Preuss, et al. · 2018 · Labour Economics · 122 citations

    We assess the short-term employment effects of the introduction of a national statutory minimum wage in Germany in 2015. For this purpose, we exploit variation in the regional treatment intensity, assuming that the stronger a minimum wage "bites" into the regional wage distribution, the stronger the regional labour market will be affected. In contrast to previous studies, we draw upon detailed individual wage data from the Structure of Earnings Survey (SES) 2014 and combine it with administrative information on regional employment. Moreover, using the Socio-Economic Panel (SOEP), we are able to affirm the absence of anticipation effects and verify the assumption of a common trend in wages be

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  4. Minimum-Wage Increases and Low-Wage Employment: Evidence from Seattle

    Ekaterina Jardim, M. Long, Robert D. Plotnick, et al. · 2022 · American Economic Journal: Economic Policy · 108 citations

    Seattle raised its minimum wage to as much as $11 in 2015 and as much as $13 in 2016. We use Washington State administrative data to conduct two complementary analyses of its impact. Relative to outlying regions of the state identified by the synthetic control method, aggregate employment at wages less than twice the original minimum—measured by total hours worked—declined. A portion of this reduction reflects jobs transitioning to wages above the threshold; the aggregate analysis likely overstates employment effects. Longitudinal analysis of individual Seattle workers matched to counterparts in outlying regions reveals no change in the probability of continued employment but significant red

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  6. Employment effects of introducing a minimum wage: The case of Germany

    Oliver Holtemöller, F. Pohle · 2020 · Economic Modelling · 47 citations

    This paper contributes to the empirical literature on the employment effects of minimum wages. We analysed the introduction of a statutory minimum wage in Germany in 2015 exploiting cross-sectional variation of the minimum wage affectedness. We construct two variables that measure the affectedness for approximately 300 state-industry combinations based on aggregate monthly income data. The estimation strategy consists of two steps. We test for (unidentified) structural breaks in a model with cross-section specific trends to control for state-industry specific developments prior to 2015. In a second step, we test whether the trend deviations are correlated with the minimum wage affectedness.

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  8. The new German statutory minimum wage in comparative perspective: Employment effects and other adjustment channels

    Oliver Bruttel, Arne Baumann, M. Dütsch · 2018 · European Journal of Industrial Relations · 34 citations

    Germany was one of only seven EU member states without a statutory minimum wage before its new legislation took effect in January 2015. We explore the consequences for wage structure, employment and companies. The new wage floor brought significant increases for low-paid employees, with limited observable negative employment effects thus far. To explain these benign outcomes, we refer to institutionalist and behavioural theories and discuss a number of other adjustment channels for companies. Preliminary evidence suggests that companies in sectors highly affected have responded by reducing working hours and/or increasing work intensity and prices. Some have cut special payments and non-wage

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  11. Employment effects of the minimum wage: evidence from the Spanish 2019 reform

    Lucía Gorjón, David Martinez de Lafuente, Gonzalo Romero · 2023 · SERIEs · 20 citations

    We examine the employment effects of the 2019 minimum wage increase in Spain on individual probabilities of losing employment status (extensive margin) and lowering work intensity (intensive margin). To do so, we use variation of workers’ exposure to the reform by comparing monthly employment transitions into unemployment and reductions in number of working hours between employees earning less than the minimum wage (treatment group) and those earning more and that should therefore be unaffected by the reform (control group). We find that the new minimum wage significantly increased the probability of experiencing unemployment (1.7 percentage points) and a reduction in work intensity (0.9 per

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  13. Using Occupations to Evaluate the Employment Effects of the German Minimum Wage

    M. Friedrich · 2019 · Jahrbücher für Nationalökonomie und Statistik · 16 citations

    Abstract This paper evaluates the short to medium run employment effects of the 2015 introduction of a statutory minimum wage in Germany. The effect of the policy is recovered from variation in the bite of the minimum wage across occupations using a difference-in-differences estimator. The analysis reveals that the reform only had a small impact on employment and highlights the importance of regional effect heterogeneity. In East Germany, marginal employment decreased by about 18,000 jobs in the short run and 52,000 jobs in the medium run, respectively, due to the minimum wage. In West Germany, no negative employment effects are detectable, but regular employment increased temporarily becaus

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  15. Minimum wage standard adjustment and employment: Heterogeneity effects on the human capital investment

    Ling Lin, Hayat Khan, Qian-Qian Liu, et al. · 2024 · Heliyon · 13 citations

    Considerable debate has arisen around the potential effects of increasing the minimum wage on employment. This study aims to analyze the impact of changes in China's minimum wage standard on employment. The research utilises the canonical model method and constructs a regression model based on standard labor economics theory. The analysis is conducted using sample data from Chinese industrial enterprises between 2000 and 2007. Regression analysis is performed by categorizing enterprises based on their level of human capital investment. The findings indicate that minimum wage increases have a non-linear impact on employment, when seen from the standpoint of human capital investment. When the

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  16. Long-Term Employment Effects of the Minimum Wage in Germany: New Data and Estimators

    Marco Caliendo, N. Pestel, Rebecca Olthaus · 2023 · SSRN Electronic Journal · 11 citations

    We study the long-term effects of the 2015 German minimum wage introduction and its subsequent increases on regional employment. Using data from two waves of the Structure of Earnings Survey allows us to estimate models that account for changes in the minimum wage bite over time. While the introduction mainly affected the labour market in East Germany, the raises are also increasingly affecting low-wage regions in West Germany, such that around one third of regions have changed their (binary) treatment status over time. We apply different specifications and extensions of the classic difference-in-differences approach as well as a set of new estimators that enables for unbiased effect estimat

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  18. MINIMUM WAGE EFFECTS ON PERMANENT VERSUS TEMPORARY MINIMUM WAGE EMPLOYMENT

    MICHELE CAMPOLIETI, MORLEY GUNDERSON, BYRON LEE · 2014 · Contemporary Economic Policy · 9 citations

    We estimate the effect of minimum wages on employment using the Master Files of the Canadian Labour Force Survey over the recent period 1997–2008. Particular attention is paid to the differences between permanent and temporary minimum wage workers—an important distinction not made in the existing literature. Our estimates for permanent and temporary minimum wage workers combined are at the lower end of estimates based on Canadian studies estimated over earlier time periods, suggesting that the adverse employment effects are declining over time for reasons discussed. Importantly, the adverse employment effects are substantially larger for permanent compared to temporary minimum wage workers;

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  20. What do we really know about the employment effects of the UK’s National Minimum Wage?

    M. Brewer, Thomas F. Crossley, Federico Zilio · 2019 · SSRN Electronic Journal · 6 citations

    A substantial body of research on the UK's National Minimum Wage (NMW) has concluded that the the NMW has not had a detrimental effect on employment. This research has directly influenced, through the Low Pay Commission, the conduct of policy, including the subsequent introduction of the National Living Wage (NLW). We revisit this literature and offer a reassessment, motivated by two concerns. First, much of this literature employs difference-in-difference designs, even though there are significant challenges in conducting appropriate inference in such designs, and they can have very low power when inference is conducted appropriately. Second, the literature has focused on the binary outcome

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  23. Employment effects of minimum wage indexing: Establishment evidence from Oregon restaurants

    S. Miller, Gary A. Wagner, Alicia Plemmons · 2025 · Economic Inquiry · 4 citations

    Though 18 states will index their minimum wage to the Consumer Price Index by 2025, few studies have examined indexing's differential employment effects. Leveraging a period of stability in minimum wages (2000–2007) and two distinct national geocoded databases of establishments, we explore how indexing affected employment in Oregon restaurants, one of the earliest indexing states (2003). Nearest‐neighbor matching is used as a preprocessing step before regression, pairing individual restaurants in Oregon to restaurants with similar characteristics in states where the minimum wage was unchanged. We find evidence that establishment employment falls 3.6% after indexing, implying an employment el

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  24. Separating employment effects into job destruction and job creation: Evidence from a large minimum wage increase in the agricultural sector using administrative tax data

    M. Piek, D. von Fintel, J. Kirsten · 2020 · WIDER Working Paper · 4 citations

    This paper presents new evidence on the employment effects of a large increase in agricultural minimum wages in South Africa using anonymized tax data. We add to the minimum wage literature by differentiating employment effects resulting from the destruction of existing jobs and from the slower creation of new jobs. Using data from tax years 2010/11 to 2016/17 and difference-in-difference models, our results show that employment decreased by approximately 14 percentage points following the minimum wage increase.

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