CEPA Discussion Papers
ISSN (online) 2628-653X
URN urn:nbn:de:kobv:517-series-954
CEPA Discussion Papers are edited by
Rainald Borck, Lisa Bruttel, Marco Caliendo, Maik Heinemann and Alexander Kritikos.
The CEPA Discussion Papers Series is meant to disseminate recent research results by CEPA members to the scientific community and the interested public. Research findings published in a CEPA Discussion Paper reflect on-going research prior to publication in peer-reviewed journal articles. If you consider submitting an article to CEPA, please look at our submission guidelines.
URN urn:nbn:de:kobv:517-series-954
CEPA Discussion Papers are edited by
Rainald Borck, Lisa Bruttel, Marco Caliendo, Maik Heinemann and Alexander Kritikos.
The CEPA Discussion Papers Series is meant to disseminate recent research results by CEPA members to the scientific community and the interested public. Research findings published in a CEPA Discussion Paper reflect on-going research prior to publication in peer-reviewed journal articles. If you consider submitting an article to CEPA, please look at our submission guidelines.
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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 self-employment, as well as reservation wages and satisfaction. We also discuss difficulties 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.