TY  - RPRT
        AU  - Gregory, Terry
AU  - Zierahn-Weilage, Ulrich
        TI  - When the Minimum Wage Really Bites Hard: Impact on Top Earners and Skill Supply
        PY  - 2020/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 13633
        UR  - https://www.iza.org/index.php/publications/dp13633
        AB  - This paper provides new insights into how wages and employment adjust to a minimum wage policy along different wage and skill groups. For this, we exploit a quasi-experimental setting in the 1990s, where a German industry introduced a minimum wage at an extraordinary high level during an economic downturn with falling revenues. We find positive wage spillovers to medium-skilled workers with wages just above the minimum wage. More striking, we also find negative wage effects for high-skilled workers situated higher up in the wage distribution, followed by reduced returns to skills and skill supply in the industry. We explain these adjustments, both theoretically and empirically, with a substitution-scale model that predicts negative spillovers whenever labour demand shifts from low- to more skilled workers (substitution effect) are overcompensated by an overall decline in labour demand (scale effect).
        KW  - scale effect
KW  - unconditional quantile regression
KW  - returns to skills
KW  - spillover effects
KW  - wage restraints
KW  - wage effects
KW  - minimum wages
KW  - substitution effect
KW  - skill supply
        ER  -