Employment Adjustments Following Rises and Reductions in Minimum Wages: New Insights From a Survey Experiment. (31st October 2019)

• Record Type: Journal Article
• Authors: Bossler, Mario; Oberfichtner, Michael; Schnabel, Claus
• Is Part Of: Labour. Volume 34:Number 3(2020)
• Page Start: 323
• Page End: 346
• Publication Date: 2019-10-31
• Subjects: Labor economics -- Periodicals; Labor economics -- Europe -- Periodicals; Industrial relations -- Periodicals; Industrial relations -- Europe -- Periodicals; Labor market -- Periodicals; Labor market -- Europe -- Periodicals; 331
• DOI: 10.1111/labr.12168
• Languages: English
• ISSNs: 1121-7081

Abstract

Abstract: 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.