The Regional Effects of a National Minimum Wage

16 Pages Posted: 28 Jun 2018

See all articles by Gabriel M. Ahlfeldt

Gabriel M. Ahlfeldt

London School of Economics & Political Science (LSE) - Department of Geography and Environment

Duncan Roth

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Tobias Seidel

University of Duisburg-Essen - Mercator School of Management

Date Written: March 08, 2018

Abstract

We estimate the spatially differential effects of a nationally uniform minimum wage that was introduced in Germany in 2015. To this end, we use a micro data set covering the universe of employed and unemployed individuals in Germany from 2011 to 2016 and a difference‐in‐differences based identification strategy that controls for heterogeneity in pre‐treatment outcome trends. We find that the policy led to spatial wage convergence, in particular in the left tail of the distribution, without reducing relative employment in low‐wage regions within the first two years.

Keywords: difference-in-differences, employment, Germany, minimum wage, wage inequality

JEL Classification: J310, J580, R120

Suggested Citation

Ahlfeldt, Gabriel M. and Roth, Duncan and Seidel, Tobias, The Regional Effects of a National Minimum Wage (March 08, 2018). CESifo Working Paper Series No. 6924. Available at SSRN: https://ssrn.com/abstract=3198127

Gabriel M. Ahlfeldt (Contact Author)

London School of Economics & Political Science (LSE) - Department of Geography and Environment ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://personal.lse.ac.uk/ahlfeldg/

Duncan Roth

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Tobias Seidel

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany

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