2023-09-28 14:46:10 +00:00
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abstract: 'Minimum wages are increasingly discussed as an instrument against
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(in-work) poverty and income inequality in Europe. Just recently the
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German government opted for a substantial ad-hoc increase of the
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minimum-wage level to euro12 per hour mentioning poverty prevention as
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an explicit goal. We use the introduction of the federal minimum wage in
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Germany in 2015 to study its redistributive impact on disposable
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household incomes. Based on the German Socio-Economic Panel we analyse
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changes in poverty and income inequality investigating different
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mechanisms of the transmission from individual gross wage-rates to
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disposable household incomes. We find that the minimum wage is an
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inadequate tool for income redistribution because it does not target
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poor households. Individuals affected by the minimum wage are not
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primarily in households at the bottom of the income distribution but are
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spread across it. Consequently, welfare dependence decreases only
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marginally. The withdrawal of transfers or employment effects cannot
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explain the limited effect on poverty. Complementary simulations show
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that neither full compliance nor a markedly higher level of euro12 per
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hour can render the minimum wage more effective in reducing poverty.'
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affiliation: 'Backhaus, T (Corresponding Author), Univ Bonn, Inst Appl Microecon,
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Adenauerallee 24-42, D-53113 Bonn, Germany.
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Backhaus, Teresa, Univ Bonn, Bonn, Germany.
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Mueller, Kai-Uwe, German Inst Econ Res Berlin DIW Berlin, Berlin, Germany.
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Backhaus, Teresa, Univ Bonn, Inst Appl Microecon, Adenauerallee 24-42, D-53113 Bonn,
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Germany.'
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author: Backhaus, Teresa and Mueller, Kai-Uwe
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author-email: tbackhaus@uni-bonn.de
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author_list:
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- family: Backhaus
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given: Teresa
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- family: Mueller
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given: Kai-Uwe
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da: '2023-09-28'
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doi: 10.1177/09589287221144233
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earlyaccessdate: DEC 2022
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eissn: 1461-7269
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files: []
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issn: 0958-9287
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journal: JOURNAL OF EUROPEAN SOCIAL POLICY
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keywords: 'Minimum wage; inequality; in-work poverty; income distribution;
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tax-transfer simulation'
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keywords-plus: EMPLOYMENT; INCREASES; POLICIES; IMPACT; RISKS; POOR
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language: English
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month: MAY
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number: '2'
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number-of-cited-references: '75'
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orcid-numbers: Backhaus, Teresa/0000-0002-8696-5334
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pages: 216-232
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papis_id: 0b1988aabeb0fb27449e2d0652a2909d
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ref: Backhaus2023canfederal
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times-cited: '0'
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title: Can a federal minimum wage alleviate poverty and income inequality? Ex-post
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and simulation evidence from Germany
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000899678500001
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usage-count-last-180-days: '3'
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usage-count-since-2013: '5'
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volume: '33'
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web-of-science-categories: Public Administration; Social Issues
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year: '2023'
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