DP13005 The regional effects of Germany's national minimum wage
Author(s): | Gabriel Ahlfeldt, Duncan Roth, Tobias Seidel |
Publication Date: | June 2018 |
Keyword(s): | Difference-in-Differences, employment, Germany, minimum wage, Wage inequality |
JEL(s): | J31, J58, R12 |
Programme Areas: | Labour Economics, International Trade and Regional Economics |
Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=13005 |
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.