Minimum wages and female labor supply in Germany
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Date
2012-11-13
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Abstract
We study the labor-supply effects of subsidized minimum wages in a
structural household model with married and single households. In the
model, married women's hours react relatively strongly to minimum
wages due to substitution effects within the home production of couples
while other population groups show ambiguous reactions. An empirical
analysis for Germany shows that minimum wages would affect total
labor supply only weakly while, in our baseline experiments, married
women's average hours increase by 3-6%. Further, we finnd that costs of
a subsidized minimum wage are high and increase sharply in its level
while its labor-supply effects level out.
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Keywords
gender, labor supply, minimum wage, wage subsidies