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|Title:||Minimum wages as a barrier to entry: Evidence from Germany |
Bauer, Thomas K.
|Issue Date:||2012 |
|Series/Report no.:||Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6484|
|Abstract:||This study analyses employers' support for the introduction of industry-specific minimum wages as a cost-raising strategy in order to deter market entry. Using a unique data set consisting of 800 firms in the German service sector, we find some evidence that high-productivity employers support minimum wages. We further show that minimum wage support is higher in industries and regions with low barriers to entry. This is particularly the case in East Germany, where the perceived threat of low-wage competition from Central and Eastern European Countries is relatively high. In addition, firms paying collectively agreed wages are more strongly in favour of minimum wages if union coverage is low and the mark-up of union wage rates is high.|
product market competition
|Persistent Identifier of the first edition:||urn:nbn:de:101:1-2012080812266|
|Document Type:||Working Paper|
|Appears in Collections:||IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)|
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