Reallocation Effects of the Minimum Wage

Abstract We investigate the wage, employment, and reallocation effects of introduction a nationwide minimum wage in Germany that affected 15% all employees. Based on identification designs exploit variation exposure across individuals local areas, we find raised wages but did not lower employment. It also led to low-wage workers from smaller larger, lower- higher-paying, less more productive establishments. This worker upgrading accounts for up 17% increase induced by wage. Moreover, at regional level, average establishment quality increased areas years following