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The Minimum Wage in Germany: Institutional Setting and a Systematic Review of Key Findings

Author

Listed:
  • Dütsch Matthias

    (Federal Institute for Occupational Safety and Health (BAuA), Nöldnerstr. 40–42, 10317 Berlin, Germany)

  • Ohlert Clemens

    (Federal Institute for Occupational Safety and Health (BAuA), Nöldnerstr. 40–42, 10317 Berlin, Germany)

  • Baumann Arne

    (Federal Institute for Occupational Safety and Health (BAuA), Nöldnerstr. 40–42, 10317 Berlin, Germany)

Abstract

The introduction of a statutory minimum wage in Germany in 2015 aimed at improving the welfare of low-wage workers but was also accompanied by concerns about distortions in Europe’s largest economy. This paper provides a comprehensive survey of results from the evaluation of the German minimum wage by compiling recent descriptive evidence and a systematic literature review on causal effects through 2022. On 1 October 2022, the minimum wage was raised legislatively by 15 percent to 12 euros per hour, which affected approximately 5.8 million employees and 23 percent of companies. The war in Ukraine and the coronavirus pandemic hit minimum wage workers and minimum wage firms harder than the rest of the economy. The minimum wage thus far had the strongest causal effects directly after its introduction. Hourly wages increased, while working hours decreased, resulting in mixed effects on monthly wages. Overall employment fell slightly, with a decline in marginal employment in particular. Companies’ wage costs increased, and as productivity did not change, profits declined.

Suggested Citation

  • Dütsch Matthias & Ohlert Clemens & Baumann Arne, 2025. "The Minimum Wage in Germany: Institutional Setting and a Systematic Review of Key Findings," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 245(1-2), pages 113-151.
    • Handle: RePEc:jns:jbstat:v:245:y:2025:i:1-2:p:113-151:n:1003
    DOI: 10.1515/jbnst-2023-0038
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    More about this item

    Keywords

    minimum wage; systematic review; evaluation; Germany;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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