Universität zu Köln

Braun, Helge, Doehrn, Roland, Krause, Michael ORCID: 0000-0001-5265-3116, Micheli, Martin and Schmidt, Torsten (2020). Macroeconomic Long-Run Effects of the German Minimum Wage when Labor Markets are Frictional. Jahrbücher für Nationalökonomie und Statistik, 240 (2-3). 351 - 387. BERLIN: de Gruyter. ISSN 2366-049X

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Abstract

This paper analyzes the introduction of the German minimum wage in 2015 in a structural model geared to quantitatively assess its long-run economic effects. We first employ a simple neoclassic model where wages equal their marginal product, then extend this model to two sector economy, and finally introduce search and matching frictions. Even though all model variants remain highly stylized, they yield quantitative insights on the importance of different mechanisms and channels through which minimum wages affect outcomes in the long run. In this framework, the minimum wage has a strong negative effect on employment. When sectors are differently affected by the minimum wage, sectoral relative price changes play an important quantitative role. Other labor market policies and institutions are important for the transmission of minimum wage policy on labor market market outcomes.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Braun, Helge UNSPECIFIED UNSPECIFIED UNSPECIFIED Doehrn, Roland UNSPECIFIED UNSPECIFIED UNSPECIFIED Krause, Michael UNSPECIFIED orcid.org/0000-0001-5265-3116 UNSPECIFIED Micheli, Martin UNSPECIFIED UNSPECIFIED UNSPECIFIED Schmidt, Torsten UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-339861
DOI:	10.1515/jbnst-2018-0080
Journal or Publication Title:	Jahrbücher für Nationalökonomie und Statistik
Volume:	240
Number:	2-3
Page Range:	351 - 387
Date:	2020
Publisher:	de Gruyter
Place of Publication:	BERLIN
ISSN:	2366-049X
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Weitere Institute, Arbeits- und Forschungsgruppen > Center for Macroeconomic Research (CMR)
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language EMPLOYMENT; SEARCH; UNEMPLOYMENT Multiple languages Economics; Social Sciences, Mathematical Methods Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/33986