The Impact of the Minimum Wage on Working Hours

Aufsätze referiert extern - Web of Science

Patrick Burauel, Marco Caliendo, Markus M. Grabka, Cosima Obst, Malte Preuss, Carsten Schröder

In: Jahrbücher für Nationalökonomie und Statistik 240 (2020), 2-3, S. 233-267


The present paper analyzes how the statutory minimum wage introduced on January 1, 2015, has affected working hours in Germany up to 2016. The data used come from the Socio-Economic Panel (SOEP), which provides not only contractual working hours but also actual hours worked. Using a difference-in-differences estimation approach, we find a significant and robust reduction in contractual working hours among employees who are subject to social security contributions and earned less than the minimum wage before the introduction. The effect in 2015 is about −5 % and corresponds to a 1.7 hours reduction in average weekly working hours. The effect on actual hours is smaller and estimated less precisely. Extending the analysis until 2016 does not yield significant effects on contractual or actual working hours, while some specifications reject the common trend assumption.

Carsten Schröder

Vize-Direktor SOEP und Bereichsleitung Angewandte Panelanalysen in the German Socio-Economic Panel study Department

Markus M. Grabka

Direktorium SOEP und kommissarische Bereichsleitung Wissenstransfer in the German Socio-Economic Panel study Department

JEL-Classification: J23;J38;J81
Keywords: minimum wage; working hours; DiD estimation