Gendered Effects of the Minimum Wage

ABSTRACT

Women work disproportionately in low‐hours jobs, which pay lower wages and are more exposed to minimum‐wage policies. We estimate an equilibrium search model with worker and firm heterogeneity, jobs differing in wages and hours, and imperfect compliance. Applied to Germany, the 8.50 € minimum wage reallocates women toward higher‐hours jobs and reduces non‐employment, although firm adjustments dampen this effect. Stronger enforcement amplifies the reallocation. Raising the minimum wage up to 14 € reduces gender gaps in wages and hours; at 11 €, changes in hours account for 44.8% of the reduction in the gender income gap.