Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35297 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3875
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Against the background of the current discussion on the introduction of statutory minimum wages in Germany, this paper analyzes the potential employment and fiscal effects of such a policy. Based on estimated labor demand elasticities obtained from a structural labor demand model, the empirical results imply that the introduction of minimum wages in Germany will be associated with significant employment losses that are concentrated among marginal and low- and semi-skilled full-time workers. Even though minimum wages will lead to increased public revenues from income taxes and social security benefits, they will result in a significant fiscal burden, due to increased expenditures for unemployment benefits and decreased revenues from corporate taxes.
Subjects: 
Minimum wages
employment
public budget
fiscal effects
JEL: 
H60
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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