Fiscal Effects of Minimum Wages – An Analysis for Germany

Arbeitspapier

Against the background of the current discussion on the introduction of statutory minimum wages in Germany, this paper analyzes the potential employment and fiscal effects of such a policy. Based on estimated labor demand elasticities obtained from a structural labor demand model, the empirical results imply that the introduction of minimum wages in Germany will be associated with significant employment losses that are concentrated among marginal and low- and semi-skilled full-time workers. Even though minimum wages will lead to increased public revenues from income taxes and social security benefits, they will result in a significant fiscal burden, due to increased expenditures for unemployment benefits and decreased revenues from corporate taxes.

Object Details

• ISBN: 978-3-86788-086-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Ruhr Economic Papers ; No. 79

Classification and Topics

• Classification: Wirtschaft ; National Budget, Deficit, and Debt: General ; Wage Level and Structure; Wage Differentials ; Labor Standards: Public Policy
• Subject: Minimum wages ; employment ; public budget ; fiscal effects ; Mindestlohn ; Wirtschaftspolitische Wirkungsanalyse ; Beschäftigungseffekt ; Öffentliche Ausgaben ; Öffentliche Einnahmen ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bauer, Thomas K. ; Kluve, Jochen ; Schaffner, Sandra ; Schmidt, Christoph M.
• Event: Veröffentlichung
• (who): Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
• (where): Essen
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/26845
• Last update: 10.03.2025, 11:44 AM CET