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Reallocation Effects of the Minimum Wage

Dustmann, C; Lindner, A; Schönberg, U; Umkehrer, M; vom Berge, P; (2021) Reallocation Effects of the Minimum Wage. The Quarterly Journal of Economics 10.1093/qje/qjab028. (In press). Green open access

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Abstract

We investigate the wage, employment and reallocation effects of the introduction of a nationwide minimum wage in Germany that affected 15% of all employees. Based on identification designs that exploit variation in exposure across individuals and local areas, we find that the minimum wage raised wages, but did not lower employment. It also led to the reallocation of low-wage workers from smaller to larger, from lower- to higher-paying, and from less- to more-productive establishments. This worker upgrading accounts for up to 17% of the wage increase induced by the minimum wage. Moreover, at the regional level, average establishment quality increased in more affected areas in the years following the introduction of the minimum wage.

Type: Article
Title: Reallocation Effects of the Minimum Wage
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/qje/qjab028
Publisher version: https://doi.org/10.1093/qje/qjab028
Language: English
Additional information: © The Author(s) 2021. Published by Oxford University Press on behalf of President and Fellows of Harvard College. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/).
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10136135
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