abstract: 'Minimum wages are increasingly discussed as an instrument against

  (in-work) poverty and income inequality in Europe. Just recently the

  German government opted for a substantial ad-hoc increase of the

  minimum-wage level to euro12 per hour mentioning poverty prevention as

  an explicit goal. We use the introduction of the federal minimum wage in

  Germany in 2015 to study its redistributive impact on disposable

  household incomes. Based on the German Socio-Economic Panel we analyse

  changes in poverty and income inequality investigating different

  mechanisms of the transmission from individual gross wage-rates to

  disposable household incomes. We find that the minimum wage is an

  inadequate tool for income redistribution because it does not target

  poor households. Individuals affected by the minimum wage are not

  primarily in households at the bottom of the income distribution but are

  spread across it. Consequently, welfare dependence decreases only

  marginally. The withdrawal of transfers or employment effects cannot

  explain the limited effect on poverty. Complementary simulations show

  that neither full compliance nor a markedly higher level of euro12 per

  hour can render the minimum wage more effective in reducing poverty.'
affiliation: 'Backhaus, T (Corresponding Author), Univ Bonn, Inst Appl Microecon,
  Adenauerallee 24-42, D-53113 Bonn, Germany.

  Backhaus, Teresa, Univ Bonn, Bonn, Germany.

  Mueller, Kai-Uwe, German Inst Econ Res Berlin DIW Berlin, Berlin, Germany.

  Backhaus, Teresa, Univ Bonn, Inst Appl Microecon, Adenauerallee 24-42, D-53113 Bonn,
  Germany.'
author: Backhaus, Teresa and Mueller, Kai-Uwe
author-email: tbackhaus@uni-bonn.de
author_list:
- family: Backhaus
  given: Teresa
- family: Mueller
  given: Kai-Uwe
da: '2023-09-28'
doi: 10.1177/09589287221144233
earlyaccessdate: DEC 2022
eissn: 1461-7269
files: []
issn: 0958-9287
journal: JOURNAL OF EUROPEAN SOCIAL POLICY
keywords: 'Minimum wage; inequality; in-work poverty; income distribution;

  tax-transfer simulation'
keywords-plus: EMPLOYMENT; INCREASES; POLICIES; IMPACT; RISKS; POOR
language: English
month: MAY
number: '2'
number-of-cited-references: '75'
orcid-numbers: Backhaus, Teresa/0000-0002-8696-5334
pages: 216-232
papis_id: 0b1988aabeb0fb27449e2d0652a2909d
ref: Backhaus2023canfederal
times-cited: '0'
title: Can a federal minimum wage alleviate poverty and income inequality? Ex-post
  and simulation evidence from Germany
type: article
unique-id: WOS:000899678500001
usage-count-last-180-days: '3'
usage-count-since-2013: '5'
volume: '33'
web-of-science-categories: Public Administration; Social Issues
year: '2023'