High-Impact Minimum Wages and Heterogeneous Regions
41 Pages Posted: 11 Apr 2013
There are 2 versions of this paper
High-Impact Minimum Wages and Heterogeneous Regions
High-Impact Minimum Wages and Heterogeneous Regions
Date Written: March 1, 2013
Abstract
We estimate the effects on wage and employment growth rates of the introduction and subsequent increases of a substantial minimum wage in the main construction industry of Germany. Using a regional dataset constructed from individual employment histories, we exploit the spatial dimension and border discontinuities of the regional data to account for spillovers between districts and unobserved heterogeneity at the local level. The results indicate that the minimum wage increased the wage growth rate for East Germany but did not have a significant impact on the West German equivalent.
The estimated effect on the employment growth rate reveals a contraction in the East of about 2.6 to 3.1 percentage points for a one-standard-deviation increase in the minimum-wage bite, amounting to roughly half of the overall decline in the growth rate, but no significant change is observed for the West.
Keywords: construction sector, Germany, minimum wage, spatial heterogeneity, spatial panel data
JEL Classification: J31, J38
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties
By Arindrajit Dube, T. William Lester, ...
-
Does a Higher Minimum Wage Enhance the Effectiveness of the Earned Income Tax Credit?
By David Neumark and William Wascher
-
By David Neumark and William Wascher
-
Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?
By David Neumark, John Michael Ian S Salas, ...
-
Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?
By David Neumark, John Michael Ian S Salas, ...
-
Do Frictions Matter in the Labor Market? Accessions, Separations and Minimum Wage Effects
By Arindrajit Dube, T. William Lester, ...