Abstract

A key challenge in evaluating the uniform minimum is that there are no natural control groups. The reason is that a statutory minimum wage that applies to (almost) all establishments is likely to affect the entire qualification and production factor structure. As a result, it will be hard to find individuals or establishments who have not been indirectly affected by the minimum wage and with whom one may compare directly affected individuals or establishments. Against this background, the project seeks to identify minimum wage effects in German regions that are close to a foreign border. To analyse whether foreign border regions may serve as a suitable control group, we explore whether the minimum wage has created any within foreign-country spillover effects for regions close to the German border. As long as spillover effects may be ruled out, we use in a second step the regional policy variation for the evaluation of the minimum wage in the border area.