Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191749
Authors: 
Caliendo, Marco
Schröder, Carsten
Wittbrodt, Linda
Year of Publication: 
2018
Series/Report no.: 
SOEPpapers on Multidisciplinary Panel Data Research 1018
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 short-run effects of this new minimum wage on a wide set of socio-economic outcomes, such as employment and working hours, earnings and wage inequality, dependent and selff-employment, as well as reservation wages and satisfaction. We also discuss diffculties 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 materialized 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 non-compliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy.
Subjects: 
Minimum wage
Evaluation
Earnings
Working hours
Employment
JEL: 
J22
J23
J31
J38
Document Type: 
Working Paper

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