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Title:Product Market Competition and the Minimum Wage PDF Logo
Authors:Bachmann, Ronald
Bauer, Thomas K.
Kroeger, Hanna
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Wages: Bargaining and Minimum Wage D19-V3
Abstract:This study analyzes employers' support for the introduction of minimum wages in order to improve their competitive position. Using a unique data set consisting of 800 firms in eight industries in the German service sector, we find some evidence that high-productivity employers support minimum wages to drive low-productivity firms out of the market. Furthermore, firms in highly competitive industries tend to support a minimum wage to prevent low-wage competition from other EU member states. In addition, there is strong evidence that members of employer associations are more likely to support a minimum wage when trade unions are weak.
Subjects:Minimum wage
product market competition
service sector
JEL:J38
J50
L41
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

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