Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267438 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15701
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper studies the price and employment response of firms to the introduction of a nation-wide minimum wage in Germany. Widely throughout the economy, affected firms responded by rapidly and frequently increasing prices without cutting employment. These decisions are strongly interrelated: Firms that increased prices relatively more often also showed a less negative employment response. The relative importance of both adjustment margins is associated with product market competition and the specific economic situation firms face during the treatment period. Hence, understanding the role of price pass-through appears to be key for explaining employment effects of minimum wages.
Subjects: 
minimum wage
price pass-through
employment
interrelation of firms' choices
JEL: 
E31
E24
J38
J31
Document Type: 
Working Paper

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