Did earnings mobility change after minimum wage introduction? Evidence from parametric and semi‐nonparametric methods in Germany. (25th August 2022)

• Record Type: Journal Article
• Authors: Naguib, Costanza
• Is Part Of: Journal of applied econometrics. Volume 37:Number 7(2022)
• Page Start: 1379
• Page End: 1402
• Publication Date: 2022-08-25
• Subjects: earnings dynamics -- functional copula model -- minimum wage -- positional persistence -- semi‐nonparametric estimation; Econometrics -- Periodicals; 330.015195
• DOI: 10.1002/jae.2926
• Languages: English
• ISSNs: 0883-7252

Abstract

Summary: We analyze the evolution of earnings mobility in Germany between 2011 and 2018. We use transition matrices and parametric and semi‐nonparametric copula models to assess the impact of the introduction of the national minimum wage on January 1, 2015, on individual positional persistence in the wage distribution. We find a drop in mobility at the bottom of the distribution. This is confirmed both by the parametric and the semi‐nonparametric methods used. Prediction accuracy of the semi‐nonparametric model is higher than that of the fully parametric model.