TY  - RPRT
        AU  - Müller, Kai-Uwe
AU  - Steiner, Viktor
        TI  - Would a Legal Minimum Wage Reduce Poverty? A Microsimulation Study for Germany
        PY  - 2008/May/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3491
        UR  - https://www.iza.org/index.php/publications/dp3491
        AB  - 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.
        KW  - minimum wage
KW  - wage distribution
KW  - working poor
KW  - poverty reduction
KW  - micro-simulation
        ER  -