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ResearchPaper
2022

Mind the gap: effects of the national minimum wage on the gender wage gap in Germany

Abstract (English)

With its introduction in 2015, the statutory minimum wage in Germany intends to benefit primarily low-wage workers. Thus, this paper aims at estimating the effectiveness of the implemented wage floor on gender wage gaps in the lower half of the wage distribution. Using administrative data, distinct regional differences regarding magnitudes of wage differentials and responses to the minimum wage are identified. Overall, wage gaps between men and women at the 10th percentile decrease by 2.46 and 6.34 percentage points respectively in the West and East of Germany after 2015. Applying counterfactual wage distributions, the study provides new evidence that around 60% and even 95% of the decline result from the introduction of the minimum wage in each region. Further, group-specific analyses identify concrete responses on the basis of age, educational level and occupational activity. Having yearly data, the study additionally reveals new results on the impact of the successive minimum wage raises in 2017 and 2019. Counterfactual aggregate decompositions of gender wage gaps finally indicate a decrease in discriminatory remuneration structures in the West of Germany due to the introduced wage floor.

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Notes

Publication license

Publication series

Hohenheim discussion papers in business, economics and social sciences; 2022,06

Published in

Faculty
Faculty of Business, Economics and Social Sciences
Institute
Institute of Economics

Examination date

Supervisor

Edition / version

Citation

DOI

ISSN

ISBN

Language
English

Publisher

Publisher place

Classification (DDC)
330 Economics

Original object

Sustainable Development Goals

BibTeX

@techreport{Schmid2022, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/6796}, author = {Schmid, Ramona}, title = {Mind the gap: effects of the national minimum wage on the gender wage gap in Germany}, year = {2022}, school = {Universität Hohenheim}, series = {Hohenheim discussion papers in business, economics and social sciences}, }
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