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Employment Adjustments Following Rises and Reductions in Minimum Wages: New Insights From a Survey Experiment
Author(s) -
Bossler Mario,
Oberfichtner Michael,
Schnabel Claus
Publication year - 2020
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/labr.12168
Subject(s) - minimum wage , economics , german , labour economics , wage , efficiency wage , reduction (mathematics) , hourly wage , mathematics , geography , geometry , archaeology
The effects of large minimum wage increases are still unknown. Our survey experiment randomly assigns increases or decreases in minimum wages to German establishments and asks about employers’ expectations concerning employment adjustments. The larger the increase in the minimum wage is, the larger the expected reduction in employment. The reduction is stronger in plants that are more strongly affected by the current national minimum wage and in plants that have neither collective agreements nor a works council. In contrast, employment expectations do not increase if the minimum wage is reduced. This mainly reflects that few plants would cut wages.