Labor Market Frictions and Spillover Effects from Publicly Announced Sectoral Minimum Wages

Abstract

"This paper analyzes the horizontal spillover effects of Germany's first sectoral minimum wage. Using a difference-in-differences estimation, I examine the impact of the public announcement and introduction of the minimum wage on sub-minimum wage workers in related jobs outside the minimum wage sector, defined using employment flows. I find an increase in wages and job-to-job transitions for sub-minimum wage workers in related jobs. The spillover effects are driven by workers who reallocate to better-paying establishments, have low labor market experience, and are more closely connected to the minimum wage sector by having former coworkers in that sector." (Author's abstract, IAB-Doku) ((en))

Cite article

Demir, G. (2024): Labor Market Frictions and Spillover Effects from Publicly Announced Sectoral Minimum Wages. (IZA discussion paper / Forschungsinstitut zur Zukunft der Arbeit 17510), Bonn, 77 p.