Do minimum wages increase job satisfaction? Micro‐data evidence from the new German minimum wage

Bossler, Mario; Broszeit, Sandra

doi:10.1111/labr.12117

Cited by 28 publications

(29 citation statements)

References 41 publications

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“…But employers conceded that while the minimum wage triggered these actions, it was not the actual reason behind these adjustments. On the level of individual employees, quantitative studies show that employees who benefitted from the introduction of the minimum wage reported a slight increase in their subjectively perceived job satisfaction, while work effort has not increased significantly (Bossler and Broszeit 2016;Pusch and Rehm 2017). At the same time, the requirements and workload of these groups seem to have increased (Pusch and Rehm 2017;Koch et al 2018).…”

Section: Labour Productivitymentioning

confidence: 99%

The effects of the new statutory minimum wage in Germany: a first assessment of the evidence

Bruttel

2019

J Labour Market Res

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Germany did not establish a statutory minimum wage until 2015. The new wage floor was set at an initial level of €8.50 per hour. When it was introduced, about 11 percent of German employees earned less than that amount. Based on descriptive figures, qualitative research and difference-indifferences analyses, we provide an overview of the available evidence regarding some of the topics that have attracted the most attention in international research and policy debates: the effects on wages and the wage distribution including issues of compliance in relation to the implementation of the new minimum wage, on the risk of poverty, on employment and the impact on businesses for instance with respect to productivity, prices or profits. The evidence shows that the minimum wage has increased hourly wages significantly, while the effect on monthly salaries has been far less substantial, as companies have partly reduced contractually agreed-upon working hours. Besides reductions in working hours or increases in work intensity, companies highly affected by the introduction of the minimum wage have used price increases and have had to accept profit reductions as a response to the new wage floor. If studies found any employment effects, they were-whether positive or negative-rather small in relation to the overall number of jobs. As in other countries, the minimum wage has not helped to reduce welfare dependency and the risk of poverty. Non-compliance remains a challenge for the implementation of the new statutory minimum wage.

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Section: Labour Productivitymentioning

confidence: 99%

The effects of the new statutory minimum wage in Germany: a first assessment of the evidence

Bruttel

2019

J Labour Market Res

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“…Autor et al (2016) point out that potential mechanisms behind wage spillovers are not fully understood. Applications for Germany include Brautzsch and Schultz (2015), Amlinger et al (2016), Mindestlohnkommission (2016b), Caliendo et al (2017), Bossler and Broszeit (2017), Bruttel et al (2018), and Ahlfeldt et al (2018) who all confirm wage increases at the bottom of the distribution for Germany. Another important finding is the significant degree of non-compliance.…”

Section: Literaturementioning

confidence: 99%

Does the German Minimum Wage Help Low Income Households?: Evidence from Observed Outcomes and the Simulation of Potential Effects

Backhaus

Müller

2019

SSRN Journal

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Does the federal minimum wage in Germany introduced in 2015 improve the income situation of low income households and reduce in-work poverty? Previous literature on its distributional impact was either focused on earnings and hourly wages (e.g. Caliendo et al., 2017), or is based on ex-ante simulations (e.g. Müller and Steiner, 2013). This paper provides systematic descriptive ex-post evidence on the distributional implications of the German minimum wage on wages and disposable household incomes as well as some underlying mechanisms. We analyze various measures of hourly wage and disposable household income distributions, both, for the group of affected individuals and the entire population. Most approaches identify individuals affected by the minimum wage based on pre-reform wages ignoring large job fluctuations and measurement error at the bottom of the wage distribution. In contrast, we define the group of affected by people's relative position in the wage distribution in each respective year. Full compliance scenarios are simulated at the actual and markedly higher minimum wage levels to interpret observational outcomes and gauge the redistributive potential of the minimum wage. We find evidence for wage increases at the bottom of the wage distribution. Effects on wage inequality are limited because of non-compliance, difficulties in hourly wage measurement in certain types employment, and unequal wage growth across the distribution. Confirming previous simulation evidence the minimum wage proves to be an ineffective tool for the redistribution of disposable household incomes. Overall inequality has even increased slightly as incomes of poor households grew below average. Affected households are not found primarily at the bottom, but rather in the middle of the income distribution. Working hours of individuals and earnings of other members in households affected by the minimum wage decreased. Benefit withdrawal is of minor importance as welfare transfers and top-up benefits were only marginally reduced by the minimum wage.

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“…To analyze well-being effects of the minimum wage, the SOEP has several advantages over alternative data sources that are used in the literature (e.g., Bossler and Broszeit, 2017;Pusch and Rehm, 2017): In particular, the SOEP includes different measures of well-being, including life satisfaction, job satisfaction, and pay satisfaction. It also includes small organizations instead of only focusing on large and medium enterprises (Bossler and Broszeit, 2017), which is an important aspect because small organizations tend to be more strongly affected by the minimum wage (Falck et al, 2013;Heumer et al, 2013;Kalina and Weinkopf, 2015;Pusch and Rehm, 2017). In addition, as a representative data set the SOEP does not oversample particular groups such as those who receive unemployment benefits (Pusch and Rehm, 2017).…”

Section: Datamentioning

confidence: 99%

“…Only few studies, however, have analyzed the effects of minimum wages on well-being (Bossler and Broszeit, 2017;Pusch and Rehm, 2017). 1 The present study investigates how the introduction of a minimum wage influences different dimensions of well-being: life satisfaction, job satisfaction, and pay satisfaction of those who earned less than the minimum wage before.…”

Section: Introductionmentioning

confidence: 97%

“…Previous literature investigating the effect of minimum wages on well-being finds that the introduction of a minimum wage has positive effects on job and pay satisfaction (Bossler and Broszeit, 2017;Pusch and Rehm, 2017). We contribute to the existing research by including a broader set of well-being measures, namely, by considering life satisfaction in addition to job and pay satisfaction.…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Minimum Wages on Well-Being: Evidence from a Quasi-experiment in Germany

Gülal

Ayaita

2019

J Happiness Stud

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SOEPpapers on Multidisciplinary Panel Data Research at DIW Berlin This series presents research findings based either directly on data from the German SocioEconomic Panel study (SOEP) or using SOEP data as part of an internationally comparable data set (e.g. CNEF, ECHP, LIS, LWS, CHER/PACO). SOEP is a truly multidisciplinary household panel study covering a wide range of social and behavioral sciences:

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Do minimum wages increase job satisfaction? Micro‐data evidence from the new German minimum wage

Cited by 28 publications

References 41 publications

The effects of the new statutory minimum wage in Germany: a first assessment of the evidence

The effects of the new statutory minimum wage in Germany: a first assessment of the evidence

Does the German Minimum Wage Help Low Income Households?: Evidence from Observed Outcomes and the Simulation of Potential Effects

The Impact of Minimum Wages on Well-Being: Evidence from a Quasi-experiment in Germany

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