Mind the Gap: Effects of the National Minimum Wage on the Gender Wage Gap of Full-Time Workers in Germany

With its introduction in 2015, the national minimum wage intends to benefit primarily low-wage workers in Germany. I examine the effectiveness of the minimum wage on gender wage gaps of full-time workers among the lower half of the wage distribution. Using administrative data, distinct regional differences in the extent of wage differentials and responses to the minimum wage occur. Overall, wage gaps between men and women at the 10th percentile decrease by 2.46 and 6.34 percentage points in the West and East of Germany after 2015. Applying counterfactual wage distributions, I provide new evidence that the introduction of the minimum wage decreases wage differentials by 60% to 95%. Group-specific analyses show various responses on the basis of age, educational level and occupational activity. Counterfactual aggregate Oaxaca-Blinder decompositions indicate a decrease in discriminatory remuneration structures in the West of Germany resulting from the introduced minimum wage.

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