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Title: The regional effects of Germany's national minimum wage

Author(s): Gabriel Ahlfeldt, Duncan Roth and Tobias Seidel

Publication Date: June 2018

Keyword(s): Difference-in-Differences, employment, Germany, minimum wage and Wage inequality

Programme Area(s): International Trade and Regional Economics and Labour Economics

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 individ-uals 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 par-ticular in the left tail of the distribution, without reducing relative employment in low-wage regions within the first two years.

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Bibliographic Reference

Ahlfeldt, G, Roth, D and Seidel, T. 2018. 'The regional effects of Germany's national minimum wage'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13005