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Nicole Horschel / Hagen Lesch IW-Trends No. 4 25. December 2011 Fiscal Costs of a Minimum Wage
Fiscal Costs of a Minimum Wage
Nicole Horschel / Hagen Lesch IW-Trends No. 4 25. December 2011

Fiscal Costs of a Minimum Wage

German Economic Institute (IW) German Economic Institute (IW)

Calculations based on the IW-Simulation Model suggest that a minimum wage of 8.50 euro would save the government 5 billion euro if it had no negative effects on the labor market. If the minimum wage, however, leads to significant job losses among low-skilled workers it would burden taxpayers with an extra 0.8 billion euro. If the job losses include a sizable number of full-time workers the extra tax burden will rise to 6.6 billion euro. In the long run the negative effects on the fiscal balance would presumably grow because companies would invest less and the human capital of the unemployed would degenerate.

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The Pros and Cons of Trade Union Membership
Helena Bach / Carolin Fulda / Sandra Vogel IW-Trends No. 1 12. March 2024

The Pros and Cons of Trade Union Membership

The decline in collective bargaining coverage in Germany is often attributed to the reluctance of companies to join an employers' association which negotiates collective agreements.

IW

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Thomas Obst / Maximilian Stockhausen IW-Analyse No. 155 9. January 2024

A Macroeconomic Analysis of Wage-Price Spirals

The subject of this Analysis is the forms that wage-price spirals can take and how they influence macroeconomic stability and inflationary trends in Germany.

IW

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