Finland paper: German minimum wage could be ‘too high’
Research paper published by Bank of Finland assesses impact of policy
Germany will introduce a minimum wage of €8.50 in January, but this "could potentially be too high" according to a research paper published by the Bank of Finland, particularly for the east of the country.
In The introduction of a minimum wage in Germany: background and potential Employment effects, Michaela Schmöller uses a combination of theoretical and empirical evidence to assess the impact of the policy.
"Combining the branch-level evidence with those from economic theory, neutral to slightly negative overall employment effects could be a likely outcome of the minimum wage introduction," the author says.
Moreover, the author adds, the "burden" of the minimum wage will be felt differently across the country, with a "substantially higher risk of employment losses in the east".
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