Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142401
Authors: 
Bachmann, Ronald
Frings, Hanna
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9962
Abstract: 
This paper investigates the degree of monopsony power of employers in different industries against the background of a statutory minimum wage introduction in Germany in January 2015. A semi-structural estimation approach is employed based on a dynamic model of monopsonistic competition. The empirical analysis relies on a linked employer-employee data set which allows to control for heterogeneity both on the worker and on the firm side. The results show important differences in monopsonistic competition among low-wage industries: While retailing, the hotel and restaurant industry as well as agriculture can be described as monopsonistic labour markets, this is not true for other services and manufacturing of food products. From a policy point of view, the introduction of a uniform minimum wage may therefore lead to different employment reactions in industries with a similar minimum wage bite.
Subjects: 
monopsony
minimum wage
low-wage industries
labor-supply elasticities
Germany
JEL: 
J42
J31
J38
Document Type: 
Working Paper

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