Effects of the statutory minimum wage on employment and unemployment
The project aims to evaluate the effects of the statutory minimum wage on employment and unemployment using a variety of methods and is divided into two parts. The first part of the project is a continuation of the analyses from previous projects of the Minimum Wage Commission. Based on employment statistics from the Federal Employment Agency (BA) and the VSE/VE earnings (structure) surveys, the effects of the minimum wage on the dimensions of “employment” and “unemployment” will be examined at several levels and for different groups (regions, economic sectors, companies, sociodemographic groups) up to 2023 and 2024. The second part of the project will exploit the analytical potential of the new earnings survey (VE) and use the so-called bunching approach, an alternative and more recent methodological approach to minimum wage evaluation. To this end, changes in employment along the wage distribution will be compared in regions highly and lowly affected by the minimum wage. The VE of April 2022 and April 2023 will be used to evaluate the effects of the two minimum wage increases in July and October 2022.
Project implementation: Evaluation Office Caliendo
Effects of the statutory minimum wage on wages and working hours
The aim of the project is to evaluate the effects of raising the statutory minimum wage to €12 on hourly and monthly wages, various wage components, working hours, and the volume of work. To this end, data from the new earnings survey (VE) conducted by the Federal Statistical Office for April 2022 and April 2023, as well as earlier waves of the earnings structure survey (VSE), will be used. Changes in the study population and target variables will first be presented in detail in a descriptive manner. In addition, the project will determine how the increase in the statutory minimum wage to €12 has causally affected the aforementioned variables.
Project implementation: Institute for Applied Economic Research (IAW) in cooperation with the RWI – Leibniz Institute for Economic Research
Special survey and analysis of the Socio-Economic Panel (SOEP) on working hours of employees in the minimum wage sector
The project has two objectives, which will be addressed in two project packages. First, SOEP evaluations from the fourth report of the Minimum Wage Commission are to be updated by 2023 and continued for the reports in 2025 and 2027. Second, the information on working hours collected in the SOEP is to be expanded and validated as part of the SOEP survey in 2024. A previous project found that the gross monthly earnings reported in the SOEP largely correspond to the gross monthly earnings reported to the statutory pension insurance scheme. Possible errors in the calculation of gross hourly wages can therefore be attributed mainly to inaccuracies, rounding, or other measurement errors in the collection of working time data in the SOEP. Particularly in view of the extent of non-compliance, which varies considerably between different data sources, it is important to examine the causes and consequences of possible measurement errors in more detail.
Project implementation: DIW Econ
Effects of the statutory minimum wage on businesses and companies
The aim of this research project is to identify causal effects of the statutory minimum wage on the competitiveness and competitive conditions of businesses and companies. To this end, business targets for the period 2021 to 2026 will be examined on the basis of the IAB Establishment Panel. The focus will be on evaluating the minimum wage increases in 2022 and 2025. The following indicators will be examined: business demand for labor and changes in the employment structure, recruitment and filling of vacancies, employee turnover and attrition rates, changes in competitive pressure, productivity and profitability, and investment in physical and human capital.
Project implementation: Institute for Employment Research (IAB)
Effects of raising the minimum wage to €12 on individual employment movements
The aim of the study is to identify the causal effects of raising the statutory minimum wage to €12 on individual employment movements between companies and between forms of employment, as well as on intra- and inter-company wage structures. The evaluation will be carried out using appropriate quantitative methods based on data from the Integrated Employment Biographies (IEB) of the Institute for Employment Research (IAB).
Project implementation: Institute for Advanced Studies (IHS)
Awareness level of the minimum wage and reasons for non-compliance
A representative survey of employees will be conducted to determine the level of awareness of the statutory minimum wage in Germany and the level of awareness of available sources of information on the minimum wage. The survey will be conducted at two points in time with 2,000 employed persons – excluding self-employed persons and trainees – aged between 18 and 65. An additional qualitative, guided follow-up survey of people who stated in the representative survey that they earn less than the minimum wage will shed light on the reasons and contextual factors for non-compliance with the minimum wage.
Project implementation: Ipsos
The significance of the statutory minimum wage for companies and employees in the courier, express, and parcel service sector
The aim of the study is to identify and describe the effects of the statutory minimum wage on companies and employees in the courier, express, and parcel service sector. The study will use qualitative methods to determine the effects of the statutory minimum wage and the adjustment responses of companies and employees in this sector. Guided interviews will be conducted with decision-makers at companies affected by the minimum wage and with employees affected by the minimum wage. In addition, inter-company actors on both the employer and employee sides (associations, chambers, trade unions) with practical experience in advising relevant companies and employees will be surveyed. The interviews will shed light on the perceived effects of the statutory minimum wage, the adjustment responses to it, their reasons and expectations, and the contextual conditions in which they take place.
Project implementation: Institute for Social Research and Social Policy (ISG)
Effects of the statutory minimum wage on consumer prices
The research project aims to conduct a causal impact study on the effects of the statutory minimum wage on consumer prices for the years 2013 to 2023. To this end, price information based on consumer price data from the Federal Statistical Office will be converted to the classification of economic activities. For economic sectors, in turn, measures of minimum wage impact will be calculated using an additional data set, such as the Earnings Structure Survey (VSE), Earnings Survey (VE), etc., and fed into the price data in order to evaluate the causal effects of the minimum wage.
Project implementation: DIW Econ
Application of machine learning in minimum wage research
The project aims to demonstrate the potential of machine learning for minimum wage research in general and to undertake an initial minimum wage-related application of machine learning based on online job advertisement data for Germany. To this end, a detailed literature review of previous applications of machine learning in international research on minimum wages will be conducted. Second, based on online job advertisement data, the question of whether the statutory minimum wage has led to changes in the volume and type of labor demand will be answered. To this end, evaluations will be carried out on the links between the introduction and increases in the minimum wage and qualification requirements, occupations and activities in demand, and the employment conditions stated in advertised low-wage jobs.
Project implementation: Federal Institute for Vocational Education and Training (BIBB).