The price and employment response of firms to the introduction of minimum wages

• 成果类型: Article
• 署名作者: Link, Sebastian
• 署名单位: IZA Institute Labor Economics; Leibniz Association; Ifo Institut; University of Munich; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2024.105236
• 发表日期: 2024
• 关键词: Minimum wage; Price pass-through; EMPLOYMENT; Interrelation of firms' choices

摘要

This paper studies the price and employment responses of firms to the introduction of a nationwide minimum wage in Germany. Widely throughout the economy, affected firms responded by rapidly and frequently increasing prices without cutting employment. These decisions are strongly interrelated: Firms that increased prices relatively more often also showed a less negative employment response. The relative importance of both margins is associated with product market competition and the specific economic situation firms face when being treated. The empirically strong interdependence suggests that the employment effects of minimum wages may not be properly understood when abstracting from other adjustment margins.