Working Paper

Fair Enough? Minimum Wage Effects on Fair Wages

available at SSRN

Work satisfaction and productivity depends on workers feeling they are paid fairly. Minimum wage laws aim to raise wages for low-income workers. However, we do not know how minimum wage laws affect workers' fairness perceptions. Using survey data from the German Socio-Economic Panel, we show that the introduction of a minimum wage law in Germany increased the stated fair wage of affected workers. We then experimentally investigate whether the rise in fair wages is only a mechanical response to obligatory wage increases or whether the designated minimum wage serves as a reference point for fair wages. We do not find that the minimum wage acts as a reference point. Our experimental results suggest that the existence of a minimum wage does not change how individuals evaluate the fairness of wages.


Johannes König
Levent Neyse
Carsten Schröder


Publication Date
JEL Classification
A13, C92, C93, J31, J38, J22

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