Working Paper: CEPR ID: DP13005
Authors: Gabriel Ahlfeldt; Duncan Roth; Tobias Seidel
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.
Keywords: difference-in-differences; employment; germany; minimum wage; wage inequality
JEL Codes: J31; J58; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Minimum wage introduction (J38) | spatial wage convergence (R12) |
| Minimum wage bite (J38) | increase in wages at the 10th percentile (J31) |
| Minimum wage bite (J38) | lower unemployment rates in low-wage regions (F66) |