abstract: 'Do minimum wages reduce in-work poverty and wage inequality? Or can

  alternative policies do better? Germany suffers from high unemployment

  among low-skilled workers and rising wage dispersion at the lower end of

  the wage distribution. We analyse the impact on employment, wage

  inequality, public expenditure, and incomes of poor households of three

  different policy options currently being discussed in Germany: a

  statutory minimum wage, a combination of minimum wages and wage

  subsidies, and pure wage subsidies to low-paid workers. In doing so, we

  distinguish between perfectly competitive and monopsonistic labour

  markets. We find that a minimum wage of EUR 7.50 would cost between

  410,000 and 840,000 low-paid jobs, increasing the fiscal burden, while

  only moderately raising the income of poor households. With pure wage

  subsidies, the government can always ensure more favourable employment

  effects. Combining a minimum wage with a wage subsidy turns out to be

  extremely costly and inferior to wage subsidies in all respects.'
affiliation: 'Knabe, A (Corresponding Author), Free Univ Berlin, Berlin, Germany.

  Knabe, Andreas; Schoeb, Ronnie, Free Univ Berlin, Berlin, Germany.

  Knabe, Andreas, Univ Magdeburg, D-39106 Magdeburg, Germany.

  Schoeb, Ronnie, Ifo Inst Dresden, Dresden, Germany.'
author: Knabe, Andreas and Schoeb, Ronnie
author_list:
- family: Knabe
  given: Andreas
- family: Schoeb
  given: Ronnie
da: '2023-09-28'
doi: 10.1080/09644008.2011.606316
eissn: 1743-8993
files: []
issn: 0964-4008
journal: GERMAN POLITICS
keywords-plus: INEQUALITY; SUBSIDIES
language: English
number: '4'
number-of-cited-references: '46'
orcid-numbers: Knabe, Andreas/0000-0003-1298-0416
pages: 506-526
papis_id: 716a91c1420c543afd2b2b9e32d2e2cd
ref: Knabe2011minimumwages
times-cited: '0'
title: 'Minimum Wages and their Alternatives: A Critical Assessment'
type: article
unique-id: WOS:000299222000003
usage-count-last-180-days: '0'
usage-count-since-2013: '18'
volume: '20'
web-of-science-categories: Political Science
year: '2011'