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The Employment Effect of Industry-Specific, Collectively-Bargained Minimum Wages

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  • Frings, Hanna

Abstract

This paper estimates the employment effects of industry-specific, collectively-bargained minimum wages in Germany for two occupations associated with the construction sector. I propose a truly exogenous control group in contrast to the control group design used in the literature. Further, a difference-in-differences-in-differences estimator is presented as a robustness test for occupation-specific and/or industry-specific, timevarying, unobserved heterogeneity. I do not find a significantly negative employment effect, even though the minimum wage is binding in (East) Germany. This result can be explained by substitution effects, noncompliance and models of monopsonic competition.

Suggested Citation

  • Frings, Hanna, 2012. "The Employment Effect of Industry-Specific, Collectively-Bargained Minimum Wages," Ruhr Economic Papers 348, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:348
    DOI: 10.4419/86788401
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    More about this item

    Keywords

    Minimum wage; monopsonic competition; difference-in-differences;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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