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The Causal Effects of the Minimum Wage Introduction in Germany – An Overview by Marco Caliendo; Linda Wittbrodt; Carsten Schröder is a Economics, Econometrics and Finance article available to read on EtoBox.

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## Abstract In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the shortrun effects of this new minimum wage on a wide set of socioeconomic outcomes, such as employment and working hours, earnings and wage inequality, dependent and selfemployment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non-compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low-wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialised in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of noncompliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy.

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Author

Marco Caliendo; Linda Wittbrodt; Carsten Schröder

Publisher

Walter de Gruyter GmbH

Published

2019

Language

EN

Field

Economics, Econometrics and Finance (Social Sciences)