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Steenks, Koen, Arjan Heyma & Tobias Vervliet (2025): The Effects of Dutch Youth Minimum Wage Increases on Income Inequality. In: De Economist, Jg. 173, H. 2, S. 299-330. DOI:10.1007/s10645-025-09451-z

Abstract

"This study employs increases in the Dutch Youth Minimum Wage (YMW) in 2017 and 2019 for certain age groups as a natural experiment to examine the impact of changes in minimum wages on income inequality through the employment-channel. Using the Difference-in-Difference (DiD) and Two-Stage Least Squares (2SLS) methods, it estimates the effects of YMW increases on hourly wages and working hours across various income segments. These effects are then used to simulate the monthly income distribution after the YMW increases in 2017 and 2019. This way, a comparative analysis is conducted between the observed income distribution prior to the YMW increases and the simulated income distribution thereafter, focusing on the aspect of income inequality. The findings reveal distinct effects based on the magnitude of the wage increase. Modest increases (for individuals aged 18–19) and substantial increases (for individuals aged 20–22 in 2017 and 20–21 in 2019) both generate spike and spillover effects, influencing individuals earning hourly wages up to at least 120% of the new minimum wage. Small increases reduce working hours for higher-income individuals, while larger increases negatively affect working hours for middle-income earners (100–150% of the new YMW) but benefit those earning below 100% and above 150% of the new threshold. Overall, both small and large YMW increases contribute to income redistribution by altering wages and working hours." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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Thielen, Clemens & Philipp Weinschenk (2025): Analyzing the effects of minimum wages: a microeconomic approach. In: Economic Theory, Jg. 79, H. 3, S. 945-991. DOI:10.1007/s00199-024-01607-3

Abstract

"We use a microeconomic approach to analyze the effects of minimum wages. Agents are allowed to have different productivities at different principals as well as different costs of working. We obtain several new and interesting effects. Minimum wages could influence the generated surplus when leaving employment unaffected, and destroy jobs that generate relatively high levels of surplus when affecting employment. Furthermore, minimum wages could harm agents even if these stay employed, while principals could benefit from them. We provide a complete characterization of the effects and show that these hold independently of the specific bargaining procedure and information structure." (Author's abstract, IAB-Doku) ((en))

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Tübbicke, Stefan (2025): The German National Minimum Wage Raised Employment Prospects of Unemployed Welfare Recipients. In: Social Policy and Society, S. 1-15. DOI:10.1017/s1474746425101115

Abstract

"This paper investigates the effects of the German national minimum wage introduction and its subsequent up-rating on job finding rates of unemployed welfare recipients. While the literature is inconclusive on the sign of overall employment effects of the minimum wage, the range of estimates suggests that if effects are negative, they are likely to be rather small. However, such overall effects may mask negative effects on employment prospects of unemployed welfare recipients, who tend to be only loosely attached to the labour market. For the analysis, this paper uses a sample of unemployed welfare recipients based on high-quality administrative data and employs a difference-in-differences strategy by exploiting regional variation in the bite of the minimum wage in order to estimate the effects of the minimum wage. While theoretically ambiguous, estimates show that minimum wages had a beneficial and rather homogeneous impact on job finding rates of unemployed welfare recipients. Sensitivity analyses highlight the robustness of these findings." (Author's abstract, IAB-Doku) ((en))

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Umkehrer, Matthias (2025): The Impact of the Minimum Wage on Initial Labour Market Outcomes. (IAB-Discussion Paper 16/2025), Nürnberg, 35 S. DOI:10.48720/IAB.DP.2516

Abstract

"In dieser Arbeit untersuche ich, wie sich die Einführung des bundesweiten Mindestlohns in Deutschland auf die Arbeitsmarktergebnisse junger Berufseinsteiger auswirkt. Die institutionellen Rahmenbedingungen, administrative Mikrodaten und prognostizierte Mindestlohnbetroffenheit erlauben es, die kausalen Effekte der Maßnahme zu schätzen. Dazu werden Kohorten verglichen, die zu Beginn ihres Erwerbslebens vom Mindestlohn betroffen bzw. nicht betroffen waren, wobei Selektion in Ausbildung, Endogenität des Zeitpunkts des Berufseintritts, Veränderungen in der Kohortenzusammensetzung und makroökonomische Bedingungen kontrolliert werden. Die betroffenen Kohorten wiesen höhere Einkommen, aber keine geringere Beschäftigung auf. Sie arbeiteten etwas mehr Stunden, begannen ihre Karriere häufiger bei größeren und besser entlohnenden Arbeitgebern, übten seltener Berufe mit höherer Mindestlohnbetroffenheit aus und verrichteten seltener manuelle-routine Tätigkeiten oder Hilfsarbeiten. Den Ergebnissen zufolge behindert der Mindestlohn den Übergang von der Ausbildung in das Erwerbsleben nicht, beeinflusst aber die Zusammensetzung der Unternehmen und Berufe auf dem Arbeitsmarkt." (Autorenreferat, IAB-Doku)

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Wiltshire, Justin, Carl McPherson, Michael Reich & Denis Sosinskiy (2025): Minimum Wage Effects and Monopsony Explanations. In: Journal of labor economics, S. 1-46. DOI:10.1086/735551

Abstract

"We present the first causal analysis of a seven-year run-up of minimum wages to $15. Using a novel stacked county-level synthetic control estimator and data on fast-food restaurants, we find substantial pay growth and no disemployment. Our results hold among lower-wage counties and counties without local minimum wages. Minimum wage increases reduce Separation rates and raise wages faster than prices at McDonald’s stores; both findings imply a monopsonistic labor market with declining rents. In the tight post-pandemic labor market, when laborsupply becomes more elastic, we find positive employment effects. These become larger and statistically significant after addressing pandemic-response confounds." (Author's abstract, IAB-Doku) ((en))

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Zhang, Weilong & Petra E. Todd (2025): Distributional Effects of Local Minimum Wages: A Spatial Job Search Approach. In: Journal of labor economics, Jg. 43, H. S1, S. S221-S267. DOI:10.1086/734391

Abstract

"This paper develops a spatial general equilibrium job search model to study the effects of local and universal minimum wage policies on employment, wages, job postings, vacancies, migration, and welfare. Workers search for jobs locally and in neighboring areas, deciding whether to migrate or commute after receiving remote offers. The model, estimated using ACS and QWI data, reliably forecasts commuting responses to city minimum wage hikes. Simulations show that low-skill (noncollege) workers benefit from local wage increases up to $12.50. The greatest per capita welfare gain for all workers is achieved by a $15.25 universal minimum wage." (Author's abstract, IAB-Doku) ((en))

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Özmen, Mustafa Utku & Belgi Turan (2025): Two birds, one stone: minimum wage and child labor. In: International Journal of Manpower, Jg. 46, H. 1, S. 168-196. DOI:10.1108/ijm-08-2023-0440

Abstract

"Purpose: This paper investigates the impact of quasi-exogenous and substantial increases in the minimum wage on child labor outcomes in Türkiye. The study aims to provide empirical evidence on how minimum wage policies affect child labor outcomes in a developing country context, with a focus on gender and age differences. It seeks to understand whether minimum wage increases lead to a reduction in child labor and whether the impact is different for various demographic groups. Design/methodology/Approach: The research employs a difference-in-differences methodology using data from the 2012 and 2019 Child Labor Force Survey in Türkiye. The treatment group consists of children from households with minimum wage earners, while the control group comprises children from other households. Various labor market outcomes are analyzed, and robustness checks are performed. Findings: Our findings indicate that while the overall effect of minimum wage increases on child labor is statistically insignificant, there are notable heterogeneous impacts across different demographic groups and employment sectors. Specifically, we observe a significant reduction in the employment probability of girls under the age of 15 and unpaid family workers. Additionally, the likelihood of younger children being wage earners decreases, and the minimum wage increase reduces employment in the agriculture and services sectors for certain subgroups. The impact is also more limited for children in single-adult-worker households. Social implications: These results underscore the varying effects of minimum wage policies on child labor and highlight the importance of considering demographic and sectoral differences in policy formulation. Policymakers should complement such policies with income-generating programs and targeted education initiatives to address child labor issues more comprehensively and sustainably. Originality/value: This study fills a critical gap in the limited international literature on the causal effects of minimum wage policies on child labor incidence. One notable exception, Menon and van der Meulen Rodgers (2018) have explored the impact of minimum wage on child labor in India using regional variation, our study uniquely analyzes the effects at the household level in Türkiye. This approach provides valuable insights into how minimum wage changes affect child labor outcomes in a developing economy context with a high prevalence of minimum wage earners. It also contributes to the broader economic understanding of child labor and household income dynamics." (Autorenreferat, IAB-Doku, © Emerald Group)

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Černiauskas, Nerijus & Jose Garcia-Louzao (2025): The earnings distribution in Lithuania: the role of the minimum wage. In: Journal of Economic Inequality. DOI:10.1007/s10888-025-09692-7

Abstract

"In this paper, we investigate how the minimum wage has shaped the earnings distribution in Lithuania between 2010 and 2019. We rely on a distribution regression framework and detailed Social Security records to characterize the earnings distribution along with the minimum wage incidence at a monthly frequency. According to our preferred estimates, our results imply that minimum wage increases can explain about 32% (40%) of the decline in total (bottom-tail) earnings inequality and up to 20% of average earnings growth." (Author's abstract, IAB-Doku, © Springer-Verlag) ((en))

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(2025): Fünfter Bericht zu den Auswirkungen des gesetzlichen Mindestlohns. Bericht der Mindestlohnkommission an die Bundesregierung nach § 9 Abs. 4 Mindestlohngesetz. (... Bericht zu den Auswirkungen des gesetzlichen Mindestlohns / Mindestlohnkommission 5), Berlin, 215 S. DOI:10.21934/MLK20250114

Abstract

"Seit dem Jahr 2015 gilt in Deutschland ein allgemeiner gesetzlicher Mindestlohn. Bei seiner Einführung betrug die Höhe 8,50 Euro pro Stunde. Aktuell beträgt der Mindestlohn 12,82 Euro pro Stunde. Die Mindestlohnkommission beschließt in diesem Jahr erneut über die Anpassung dieser gesetzlichen Lohnuntergrenze. Zusätzlich zu ihrem Beschluss hat die Kommission den Auftrag, der Bundesregierung einen Bericht über die Auswirkungen des Mindestlohns auf den Schutz der Arbeitnehmerinnen und Arbeitnehmer, die Wettbewerbsbedingungen und die Beschäftigung zur Verfügung zu stellen. Diesem Auftrag kommt sie mit dem vorliegenden, einstimmig beschlossenen Fünften Bericht nach. Der Betrachtungszeitraum des vorliegenden Berichts umfasst schwerpunktmäßig die Jahre 2022 bis 2024. Er dokumentiert die wissenschaftlichen Befunde zur Wirkung des Mindestlohns in diesem Zeitraum. Der Bericht enthält umfangreiche Befunde zu den Effekten der Anhebung des Mindestlohns auf 12 Euro im Oktober 2022, die im Rahmen einer Gesetzesänderung durch den Deutschen Bundestag beschlossen wurde. Dies war für diesen Bericht erstmals auf breiter Datenbasis möglich. Die dargestellten Ergebnisse stützen sich auf Forschungsprojekte, die die Mindestlohnkommission beauftragt hat, weitere wissenschaftliche Publikationen zur Mindestlohnforschung sowie Analysen, die von der Geschäftsstelle der Kommission durchgeführt wurden." (Textauszug, IAB-Doku)

Abstract

"Paragraf 10 Absatz 3 Satz 1 Mindestlohngesetz (MiLoG) ermöglicht es der Mindestlohnkommission, Anhörungen zu den Auswirkungen und der Anpassung des Mindestlohns durchzuführen. Sie kann dabei „Spitzenorganisationen der Arbeitgeber und Arbeitnehmer, Vereinigungen von Arbeitgebern und Gewerkschaften, öffentlich-rechtliche Religionsgesellschaften, Wohlfahrtsverbände, Verbände, die wirtschaftliche und soziale Interessen organisieren“ sowie sonstige von der Anpassung des Mindestlohns Betroffene vor Beschlussfassung anhören. Sie kann Informationen und fachliche Einschätzungen von externen Stellen einholen. Die Mindestlohnkommission hat diese Möglichkeit genutzt und im Frühjahr 2025 eine schriftliche Anhörung durchgeführt. Die Mindestlohnkommission hat sich dazu auf einen Kreis von Institutionen bzw. Sachverständigen geeinigt, die im Rahmen der Anhörung zu einer schriftlichen Stellungnahme aufgefordert wurden. Die Stellungnahmen sind ebenso wie die von der Mindestlohnkommission vorab versandten Themenschwerpunkte in diesem Band im Originalwortlaut dokumentiert." (Autorenreferat, IAB-Doku)

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(2025): Auswirkung der Mindestlohnanpassung und der Mindestlohnpolitik. Antwort der Bundesregierung auf die Kleine Anfrage der Abgeordneten … und der Fraktion Die Linke. (Verhandlungen des Deutschen Bundestages. Drucksachen 21/1403 (28.08.2025)), Berlin, 11 S.

Abstract

[insgesamt 22 Einzelfragen] "Das aktuelle Mindestlohnmodell kann nicht garantieren, dass rapide Preisentwicklungen durch zukünftige Mindestlohnanpassungen angemessen aufgegriffen werden – insbesondere mit Blick auf einen zunehmend volatilen Weltmarkt." (Textauszug, Dokumentations- und Informationssystem Bundestag und Bundesrat - DIP)

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Adamopoulou, Effrosyni, Francesco Manaresi, Omar Rachedi & Emircan Yurdagul (2024): Minimum wages and insurance within the firm. (ZEW discussion paper 24-021), Mannheim, 66 S.

Abstract

"Minimum wages generate an asymmetric pass-through of firm shocks across workers. We establish this result leveraging employer-employee data on Italian metalmanufacturing firms, which face different wage floors that vary within occupations. In response to negative firm productivity shocks, workers close to the wage floors experience higher job separations but no wage loss. However, the wage of high-paid workers decreases, and more so in firms with higher incidence of minimum wages. A neoclassical model with complementarities across workers with different skills rationalizes these findings. Our results uncover a novel channel that tilts the welfare gains of minimum wages toward low-paid workers." (Author's abstract, IAB-Doku) ((en))

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Ahn, Taehyun (2024): Minimum wage and self-employed business owners: Evidence from South Korea. In: Labour Economics, Jg. 88. DOI:10.1016/j.labeco.2024.102539

Abstract

"This study examines the influences of minimum wage on self-employment exits, using recent changes in the minimum wage level in South Korea. Using the cross-industry variation on the impact of the minimum wage—the proportion of workers whose wages are below the minimum wage in the upcoming year—combined with individual longitudinal data, I estimate the model of self-employment exits. Overall, the estimates show that the minimum wage hike has no significant impact on self-employed workers. However, it increases the likelihood of the business closing for the self-employed who hire employees. The results imply that a ten percent increase in the minimum wage raises the exit probability by 2.6 percentage points, which is 30.9 % of the average exit rate for those with employees. Moreover, the exits are significantly associated with the transition to non-employment." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Alessandrini, Diana & Joniada Milla (2024): Minimum Wage Effects on Human Capital Accumulation: Evidence from Canadian Data. In: Journal of Human Capital, Jg. 18, H. 2, S. 346-376. DOI:10.1086/728084

Abstract

"We investigate the impact of the minimum wage on individuals’ post-secondary schooling decisions. Using Canadian longitudinal data, we explore 136 minimum wage amendments and find three novel results. First, the minimum wage affects both thequantity and type of human capital acquired by students. A 10% increase in the minimum wage increases community-college enrollment by 6.2% but reduces University enrollment by 6.5%. Second, high minimum wages widen the university participation gap between individuals with different levels of parental education. Finally, Minimum wage hikes encourage workers who recently separated from their job to return to post-secondary education as mature students" (Author's abstract, IAB-Doku) ((en))

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Alvarez, Fernando, Robert Shimer & Fabrice Tourre (2024): Unions: Wage floors, seniority rules, and unemployment duration. In: Journal of Economic Dynamics and Control, Jg. 169. DOI:10.1016/j.jedc.2024.104965

Abstract

"This paper examines the impact of unions on unemployment and wages in a dynamic equilibrium search model. We model a union as imposing a minimum wage and rationing jobs to ensure that the union's most senior members are employed. This generates rest unemployment, where following a downturn in their labor market, unionized workers are willing to wait for jobs to reappear rather than search for a new labor market. We characterize the hazard rate of exiting unemployment, and show that it is low at long durations whenever the union-imposed minimum wage is high; we establish that a high union-imposed minimum wage generates a compressed wage distribution and a high turnover rate of jobs —properties consistent with the data. Finally, we show that seniority rules lead to lower unemployment levels, relative to an alternative rule allocating jobs to workers randomly." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Arabzadeh, Hamzeh, Almut Balleer, Britta Gehrke & Ahmet Ali Taskin (2024): Minimum wages, wage dispersion and financial constraints in firms. In: European Economic Review, Jg. 163, 2024-01-14. DOI:10.1016/j.euroecorev.2024.104678

Abstract

"This paper studies how minimum wages affect the wage distribution if firms face financial constraints. Using German employer-employee data and firm balance sheets, we document that the within-firm wage dispersion decreases more with higher minimum wages when firms are financially constrained. We introduce financial frictions into a search and matching labor market model with stochastic job matching, imperfect information, and endogenous effort. In line with the empirical literature, the model predicts that a higher minimum wage reduces hirings and separations. Firms become more selective such that their employment and wage dispersion fall. If effort increases strongly, firms may increase employment at the expense of higher wage dispersion. Financially constrained firms are more selective and reward effort less. As a result, within-firm wage dispersion and employment in these firms fall more with the minimum wage." (Author's abstract, IAB-Doku, © 2024 Elsevier) ((en))

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Arnadillo, Juan J., Amadeo Fuenmayor & Rafael Granell (2024): The relationship between minimum wage and employment. A synthetic control method approach. In: The Economic and Labour Relations Review, Jg. 35, H. 3, S. 771-791. DOI:10.1017/elr.2024.44

Abstract

"Spain increased its minimum wage (MW) by 22% in 2019. Given the intense debate in the economic literature on the impact of MW increases on the labour market, we conduct an impact assessment of this policy. The synthetic control method will be used to replicate the Spanish labour market by means of a pool of European countries that, in the absence of other reliable measures, simulates the evolution of Spanish employment. This will allow us to identify the causal effect from the increase in the MW. After applying the technique, the increase in the MW is found to have no effect on employment. The results have been subjected to robustness tests such as leave one out or segmentation by gender or age." (Author's abstract, IAB-Doku) ((en))

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Aumayr-Pintar, Christine, Carlos Vacas-Soriano, Jakub Kostolný & Marco Seghesio (2024): Minimum wages in 2024: Annual review. (Eurofound research report / European Foundation for the Improvement of Living and Working Conditions), Dublin, 94 S.

Abstract

"Minimum wages protect workers from unjustified low wages and ensure a level playing field for companies. All EU Member States and Norway have minimum wages in place, albeit in different forms. Among the 27 Member States, 22 have a national minimum wage, with one (or sometimes more than one) rate setting a basic wage floor. In addition, collective agreements are used to further regulate pay and usually set rates above the national minimum wage. In the remaining five Member States and Norway, minimum wages are set in sectorlevel collective agreements, which includes a high coverage of workers in these countries. The 2024 version of this annual review provides an update on minimum wage developments, details how the rates were set and which criteria were used in their adjustment, and maps the influence of EU-level policy on minimum wage setting." (Text excerpt, IAB-Doku) ((en))

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Azar, José, Emiliano Huet-Vaughn, Ioana Marinescu, Bledi Taska & Till von Wachter (2024): Minimum Wage Employment Effects and Labor Market Concentration. In: The Review of Economic Studies, Jg. 91, H. 4, S. 1843-1883. DOI:10.1093/restud/rdad091

Abstract

"This paper shows that more highly concentrated labor markets experience more positive employment effects of the minimum wage. In the most concentrated labor markets, employment rises following a minimum wage increase. The paper establishes its main findings by studying the effects of local minimum wage increases on a key low-wage retail sector, and using data on labor market concentration that covers the entirety of the U.S. with fine spatial variation at the occupation level. The results carry over to the fast-food sector and the entire low-wage labor market and are robust to using proxies of labour market concentration available for a broader range of industries, such as the number of establishments and population density. A model of oligopsonistic competition can explain these effects: there is more room to increase wages in high-concentration areas where wages tend to be further below marginal productivity. These findings provide evidence supporting monopsonistic wage setting as an explanation for the near-zero minimum wage employment effect documented in prior work." (Author's abstract, IAB-Doku) ((en))

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Bezooijen, Emiel van, Wiljan van den Berge & Anna Salomons (2024): The Young Bunch: Youth Minimum Wages and Labor Market Outcomes. In: ILR review, Jg. 77, H. 3, S. 428-460. DOI:10.1177/00197939241239317

Abstract

"The authors estimate the effects of an increase in the youth minimum wage in the Netherlands on low-paid workers’ employment and earnings, using a difference-in-differences approach with detailed administrative data. Findings show that the increase does not have a negative effect on the number of jobs or hours worked, hence raising overall earnings for affected workers. Further, the minimum wage increase has substantial spillover effects, accounting for close to 70% of the average wage increase experienced by workers. While employment grows in fixed-term and temporary help agency contracts, the authors do not find evidence of declines in employment in other types of work arrangements, nor of labor-labor substitution. Labor market outcomes evolve most favorably for full-time incumbent workers who are not enrolled in education and are thus less likely to be transient occupants of minimum wage jobs." (Author's abstract, IAB-Doku) ((en))