Building the Minimum Wage: Germany's First Sectoral Minimum Wage and its Impact on Wages in the Construction Industry

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe very first minimum wage in Germany was introduced in 1997 for blue-collar workers in sub-sectors of the construction industry. In the setting of a natural experiment blue-collar workers in neighboring 4-digit-industries and white-collar workers are used as control groups for differences-in-differences-in-differences estimation based on linked employer-employee data. Estimation results reveal a sizable positive average impact on wages in East Germany and no effect in West Germany. Size and significance of effects are not homogeneous across wage regimes (individual vs. collective contracts) and across the distribution suggesting spillover effects to wages where the minimum is not binding.

The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior

“…Theoretically a wage increase should also lead to a reduction in sickness absence. However, Blien et al (2009) and Rattenhuber (2011) only find small effects in East Germany, which are no threat to the application of our method and the general empirical findings. 15 There are several reasons why this type of sick pay decrease may be of minor relevance: (a) Fraction of Employees Effectively Affected.…”

Minimum wages in German industries—what does the evidence tell us so far?

“…These indirect effects include substitutive and complementary relations between the treated and non-treated within the same sector. Furthermore, a control group within the same sector might be affected by so-called spillover effects (see, for instance, Rattenhuber 2011). If the wages of workers below the wage floor are increased to the minimum wage, then firms might also be inclined to increase the wages of those whose earnings were initially above the minimum wage.…”

Distributional Effects of a Minimum Wage in a Welfare State The Case of Germany

“…This law was first introduced in the construction industry in order to prevent firms from other EU countries to compete at lower wages than the contract wage set by German employers and labor unions; see Rattenhuber (2011). Since then it has been extended to the waste industry, to roofers and electricians, to the laundry industry, to painters and varnishers, and to care services.…”