Report , News of 21 December 2014

SOEP and IAB create database to evaluate minimum wage

Starting in January 2015, researchers from the Socio-Economic Panel (SOEP) research infrastructure at DIW Berlin will, together with colleagues from the Institute for Employment Research (IAB) in Nuremberg and the University of Potsdam, be making data available for evaluation of the new statutory minimum wage in Germany. They will not only be analyzing the data themselves but also providing them for use by interested researchers worldwide. The Leibniz Association is providing 800,000 euros funding for this project for an initial period of three years. The project is among the winners of the 2015 Leibniz Competition.

How the new minimum wage legislation, which goes into effect on January 1, 2015, is an open question. Many employed people will be given a raise, but how many will be expected to work (unpaid) overtime, for instance, remains unknown. Whether and how many jobs will be cut or not created in the future is difficult to estimate. It is thus all the more important that the effects of the new minimum wage should be evaluated scientifically, for which this project will provide an important database.

“The unique feature of our evaluation of the minimum wage is that it is not being carried out on behalf of the federal government,” says SOEP Director Jürgen Schupp. “All of the data that are collected in the SOEP and in the IAB Establishment Panel from individuals and companies are made available to researchers worldwide for their scientific analyses.”

DIW President Marcel Fratzscher emphasizes that “the analysis of effects of the minimum wage is of enormous importance in order to be able to provide policy advice based on scientifically established facts in the future as well.”

Financing for the study, initial evaluations, and the workshops and conferences is being provided by the Leibniz Association. The DIW Berlin was successful in a Leibniz Competition in which applications are judged according to criteria of scientific excellence. A total of around 26 million euros are awarded by the Leibniz Association as part of the Leibniz Competition.