%0 Report
        %A Müller, Kai-Uwe
%A Steiner, Viktor
        %T Would a Legal Minimum Wage Reduce Poverty? A Microsimulation Study for Germany
        %D 2008
        %8 2008 May
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 3491
        %U https://www.iza.org/index.php/publications/dp3491
        %X In view of rising wage inequality and increasing poverty, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of the introduction of a nationwide legal minimum wage of € 7.5 per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system and net household incomes. Simulation results show that the minimum wage would be rather ineffective in reducing poverty, even if it led to a substantial increase in hourly wages at the bottom of the wage distribution and had no negative employment effects. The ineffectiveness of a minimum wage in Germany is mainly due to the existing system of means-tested income support.
        %K minimum wage
%K wage distribution
%K working poor
%K poverty reduction
%K micro-simulation