Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/224662
Authors: 
Gregory, Terry
Zierahn, Ulrich
Year of Publication: 
2020
Series/Report no.: 
ZEW Discussion Papers 20-042
Abstract: 
We investigate minimum wage spillovers by exploiting the first-time introduction of a minimum wage within a quasi-experiment in a context with an extraordinary large bite: the German roofing industry. We find positive wage spillovers for medium-skilled workers with wages just above the minimum wage, but negative effects for high-skilled top earners in East Germany, where the bite was particularly pronounced. There, the minimum wage lowered both returns to skills and skill supply. We propose a theoretical model according to which negative spillovers occur whenever a negative scale effect dominates a positive substitution effect and provide empirical support for our theory.
Subjects: 
minimum wages
wage effects
spillover effects
wage restraints
returns to skills
unconditional quantile regression
scale effect
substitution effect
skill supply
JEL: 
J31
J38
J24
C21
J23
Document Type: 
Working Paper

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