Minimum wages, productivity, and reallocation

Mirja Hälbig, Matthias Mertens and Steffen Müller
Authors registered in the RePEc Author Service: Steffen Mueller

No 8/2023, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: We study the productivity effect of the German national minimum wage combining administrative firm datasets. We analyze firm- and market-level effects, considering output price changes, factor substitution, firm entry and exit, labor reallocation, and short- versus long-run effects. We document higher firm productivity even net of output price increases. Productivity gains are persistent in manufacturing and service sectors. The minimum wage also increased manufacturing productivity at the aggregate level. Neither firm entry and exit nor other forms of employment reallocation between firms contributed to these gains. Instead, aggregate productivity gains from the minimum wage solely stem from within-firm productivity improvements.

Keywords: minimum wage; pass-through; productivity; reallocation (search for similar items in EconPapers)
JEL-codes: D24 J31 L11 L25 (search for similar items in EconPapers)
Date: 2024, Revised 2024
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-inv and nep-lma
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/289801/1/iwh-dp2023-08rev.pdf (application/pdf)

Related works:
Working Paper: Minimum Wages, Productivity, and Reallocation (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:82023

Access Statistics for this paper

More papers in IWH Discussion Papers from Halle Institute for Economic Research (IWH) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().