East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the West Dossier In a nutshell The East German economic convergence process is hardly…
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Macro Data Download
Macro Data Download On this page, you will find long time series of macroeconomic data provided by IWH for download. Please note that most files come with labels and legends in…
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Research Data Centre
Research Data Centre The IWH Research Data Centre provides external scientists with data for non-commercial research. The research data centre of the IWH was accredited by RatSWD…
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Research Clusters
Three Research Clusters Research Cluster "Economic Dynamics and Stability" Research Questions This cluster focuses on empirical analyses of macroeconomic dynamics and stability.…
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Gross domestic product
Gross domestic product Gross domestic product (GDP) includes the value of all goods and services produced in an economic area during a specific period of time. It is defined as an…
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Stock of fixed assets
Stock of fixed assets Gross fixed capital formation Gross fixed capital formation includes the purchase of permanent and reproducible fixed assets as well as created fixed assets…
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Macro data interactive
Macro data interactive This service provides time series from official publications (Statistisches Bundesamt [German Federal Statistical Office], Arbeitskreis Volkswirtschaftliche…
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Branches of economy
Branches of economy Gross domestic product, gross value added Gross domestic product (GDP) includes the value of all goods and services produced in an economic area during a…
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Minimum Wages, Productivity, and Reallocation
Mirja Hälbig, Matthias Mertens, Steffen Müller
IZA Discussion Paper,
No. 16160,
2023
Abstract
We study the productivity effect of the German national minimum wage by applying administrative firm data. At the firm level, we confirm positive effects on wages and negative employment effects and document higher productivity even net of output price increases. We find higher wages but no employment effects at the level of aggregate industry × region cells. The minimum wage increased aggregate productivity in manufacturing. We do not find that employment reallocation across firms contributed to these aggregate productivity gains, nor do we find improvements in allocative efficiency. Instead, the productivity gains from the minimum wage result from within-firm productivity improvements only.
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Minimum Wages, Productivity, and Reallocation
Mirja Hälbig, Matthias Mertens, Steffen Müller
IWH Discussion Papers,
No. 8,
2023
Abstract
We study the productivity effect of the German national minimum wage combining administrative firm datasets. We analyze firm- and market-level effects, considering output price changes, factor substitution, firm entry and exit, labor reallocation, and short- versus long-run effects. We document higher firm productivity even net of output price increases. Productivity gains are persistent in manufacturing and service sectors. The minimum wage also increased manufacturing productivity at the aggregate level. Neither firm entry and exit nor other forms of employment reallocation between firms contributed to these gains. Instead, aggregate productivity gains from the minimum wage solely stem from within-firm productivity improvements.
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