Volume 245, Issue 1-2 - Special Issue: Minimum Wages – Experiences of European Countries

There are considerable differences in minimum wage growth between EU member states with national minimum wages. Potential sources for these differences are discrepancies in economic fundamentals and institutional differences in how minimum wages are adjusted. Using a novel dataset based on macroeconomic data, institutional information on minimum wage setting and data on economic policy orientation and elections, the article tests whether growth differences in the minimum wage of 21 EU member states during the time period 2000 to 2020 can be explained by a catch-up dynamic in new EU member states, by different growth models of EU member states or by differences in the actors that are responsible for the adjustment of minimum wages. The results show that across the entire sample and irrespective of actors, minimum wage growth follows consumer price inflation and wage growth most closely. Higher than average minimum wage growth rates in EU member states stem from overshooting inflation during the period of EU accession, reducing wage inequality and increasing the Kaitz index. Actors also mattered for minimum wage growth. Adjustments by social partner consensus led to higher minimum wage growth than the benchmark of indexed minimum wages, introducing a distributive element to minimum wage adjustments.

This paper evaluates the evolution of the Dutch minimum wage since its introduction in 1969 and discusses this as an intriguing case suggesting that a deeper, economic analysis of firm and employee behaviours is required for minimum-wage analysis in general. The real level of the minimum wage has fallen tremendously after 1979, all the way back nowadays to the level of the early 1970s, due to the system of uprating and to government interventions. The minimum-wage employment share shows an even stronger decline after 1979, but, surprisingly, the share below the unchanged real minimum wage of 1979 and in bands above this has remained largely unchanged. Intriguingly, firms have continued paying the same. Composition shifts in minimum-wage employment are significant, towards larger enterprise on the demand side and towards part-time employees on the supply side. Nationally and internationally, virtually all available minimum-wage analyses of employment effects focus on rises of the minimum wage and ignore drops. However, OECD data show that declines are surprisingly frequent, making them perfectly normal economic occurrences that firms will account for. I argue that declines deserve examination in their own right, certainly also from a monopsonistic perspective. Plausibly, declines incite different responses from increases, and their analysis will require the examination of heterogeneous behaviour of both firms and employees. Such analysis will reinforce the economics of minimum-wage analysis as advocated by David Neumark and its integration in labour economics as advocated by David Card.

This paper takes a historical perspective and assesses the evolution of the institutional features in setting the minimum wage in Greece between 1975 and 2023. It also evaluates developments regarding the minimum wage level, its bite and alignment with productivity. The paper reviews the limited available empirical literature on the association of the minimum wage with labour market outcomes (average wages, employment, inequality). It presents new estimates of the elasticity of average wages to the minimum wage. One of the paper’s key points is that the minimum wage setting mechanism has changed over time as the economic environment has changed. Reviewing the evolution of the minimum wage over time to evaluate whether the minimum wage follows productivity developments and whether the minimum wage bites leads to the second and third takeaways of the paper. The minimum wage follows productivity developments over the longer term but not always in the short term. The bite of the minimum wage is high and appears to be higher when government intervention in setting the minimum wage is stronger. As for the impact of the minimum wage on average wages, the new estimates of the elasticity of the average to the minimum wage the paper provides, use more precisely measured wage rates, which show a high elasticity of average to minimum wages. Finally, the review of the existing literature on the employment effects of the minimum wage shows that, as in other countries, the results are mixed with modest negative or no effects.

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.

This article examines the effects of the introduction of the statutory minimum wage on the distribution of individual income from wages, as well as gross and net means-weighted income of workers in Germany. For the first time, data from the Survey of Income and Consumption was used, in which incomes are recorded in great detail. Both descriptive findings and the results of Unconditional Quantile Regressions indicate that the incomes of workers in regions with a high level of minimum wage intervention experienced significant increases after the introduction of the minimum wage, ranging into the middle band of the income distribution. Accordingly, the minimum wage has positively influenced the incomes of a large number of employee households.

This study examines the short-term effects of the introduction of a statutory minimum wage in Germany on hourly wages, monthly wages and paid working hours. We exploit a novel panel dataset by linking the Structure of Earnings Survey (SES) 2014 and the Earnings Survey (ES) 2015 and apply a difference-in-differences approach at the establishment level. The results indicate an effect of the introduction of the statutory minimum wage on the average hourly wages of employees in minimum wage establishments of up to 5.9 %. Due to negative effects on average working time of approximately minus 3.1 %, the effects on monthly gross earnings are smaller but still amount to up to 2.7 % on average. The results further suggest that the minimum wage effects on earnings were greater among low-wage employees than on average, in eastern Germany than in western Germany, and among part-time employees and marginal employees than among full-time employees.

The CILS4NEPS project combined and harmonized panel data from the Children of Immigrants Longitudinal Survey in Four European Countries (CILS4EU) and Starting Cohort 4 of the German National Educational Panel Study (NEPS SC4). This unlocks additional research potential beyond the scope of both individual datasets by increasing sample sizes and enabling international comparisons of the NEPS data. Both, the combined dataset as well as additional material to reproduce and expand the harmonization are available to users. In this article, we will first introduce the individual datasets and their comparability and describe the steps of the harmonization process. Furthermore, we will present the comparable content between both surveys, the structure of the harmonized dataset, and weighting issues. Subsequently, we provide descriptive statistics, the analytical potential, and information on data access. Lastly, we will finish with an outlook on the continuing harmonization of CILS4EU and NEPS SC4.

FamData is a database covering family businesses and non-family businesses across various size classes and branches containing structural and financial information. The ifo institute assembled a business panel with executives from almost 4000 companies. In addition to the “hard” business data like turnover and number of employees, the database also includes “soft” survey data. The latter one covers information from regular – at least yearly – surveys treating topics like investment behavior, skilled labor shortage or reaction of firms during the Corona pandemic situation and the rise in energy prices observed in 2022.