Zusammenfassung
In 1997 minimum wages were introduced in the West and
East German construction sector. The purpose of this paper is to analyze its impact on wage growth and employment retention probability of affected workers.
Following a difference-in-differences approach we propose a method to identify the effects of this quasi-experiment
despite the lack of information on working hours in the large panel ...
Zusammenfassung
In 1997 minimum wages were introduced in the West and
East German construction sector. The purpose of this paper is to analyze its impact on wage growth and employment retention probability of affected workers.
Following a difference-in-differences approach we propose a method to identify the effects of this quasi-experiment
despite the lack of information on working hours in the large panel micro data. The method determines the size of the treatment and control group by the Maximum-Likelihood criterion. To check for robustness, we test
alternative specifications.
All results show positive wage growth effects of the minimum
wage regulation in both parts of the country. When it comes to employment effects, the results clearly differ between the two parts of the country. The employment effects are negative for East Germany and positive for West Germany although the latter are not always statistically significant.
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