Effects of the Statutory Minimum Wage on Employment and Unemployment (Update 2022/2023)

Minimum Wage Commission
Duration:  – 
  • Evaluation & Policy Consulting
  • Labour Market & Education

This update continued the series of studies and extended the analysis period to mid-2022. It covered the introduction of the minimum wage on 1 January 2015 and all increases up to January 2022. The analysis was based on official regional-level data, linked to indicators of exposure to the minimum wage and evaluated using several variants of the difference-in-differences approach. For the first time, the data reached far enough to trace the effects across the COVID-19 pandemic. In strongly affected regions, dependent employment was 0.7 per cent lower than in weakly affected regions, driven mainly by the decline in marginal employment. This decline had intensified further compared with the previous reports, and in individual sectors such as construction, negative effects on employment subject to social insurance contributions now also emerged. The regional economic situation proved decisive: in high-growth regions, negative effects were absent, and the effects were attributable almost entirely to regions with weak growth before the introduction of the minimum wage. For individual groups, such as unskilled workers, the developments were even positive.

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