Would a Legal Minimum Wage Reduce Poverty? A Micro-simulation Study for Germany

Authors

  • Kai-Uwe Müller
  • Viktor Steiner

DOI:

https://doi.org/10.25071/1874-6322.23685

Abstract

In view of rising poverty rates, the introduction of a legal minimum wage has become an important policy issue in Germany. We analyze the distributional effects of a nationwide minimum wage of 7.50e per hour based on a micro-simulation model accounting for interactions between wages, the tax-benefit system, and net household incomes. Due to the existing system of means-tested income support, the minimum wage would be ineffective in reducing poverty in the overall population, although poverty among singles and families with children or with a female household head would be slightly reduced.

Published

2009-12-15

How to Cite

Müller, K.-U., & Steiner, V. (2009). Would a Legal Minimum Wage Reduce Poverty? A Micro-simulation Study for Germany. Journal of Income Distribution®, 18(3-4), 131. https://doi.org/10.25071/1874-6322.23685