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http://hdl.handle.net/10419/27315
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| Title: | | Would a legal minimum wage reduce poverty?: a microsimulation study for Germany  |
| Authors: | | Müller, Kai-Uwe Steiner, Viktor |
| Issue Date: | | 2008 |
| Series/Report no.: | | Discussion papers // German Institute for Economic Research 791 |
| Abstract: | | In view of rising wage inequality and increasing poverty, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of the introduction of a nationwide legal minimum wage of 7.5 per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system and net household incomes. Simulation results show that the minimum wage would be rather ineffective in reducing poverty, even if it led to a substantial increase in hourly wages at the bottom of the wage distribution and had no negative employment effects. The ineffectiveness of a minimum wage in Germany is mainly due to the existing system of meanstested income support. |
| Subjects: | | minimum wage, wage distribution working poor poverty reduction microsimulation |
| JEL: | | I32 H31 J32 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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