Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/216315 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13003
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We revisit the development of monthly wages in Germany between 2000 and 2017. While wage inequality strongly increased during the first years of this period, it recently returned to its initial level, raising the question what the role of the German minimum wage introduction for this reversal is. We identify effects of the minimum wage from difference-in-differences based on unconditional quantile regressions applied to German administrative employment data. The results show significant wage effects of varying magnitudes along the lower half of the wage distribution. Employment dynamics do not explain effects along the wage distribution, implying strong wage increases among the existing workforce. The increased individual labor income is not offset by decreasing social benefits. Overall, the introduction of the minimum wage can account for about half of the recent decrease in wage inequality.
Subjects: 
wages
inequality
minimum wage
Germany
JEL: 
J31
J38
Document Type: 
Working Paper

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