Empirical studies on minimum wages are primarily concerned with employment while their effects on income inequality receive less attention. Yet, a popular argument for a federal minimum wage in Germany is that it will prevent in-work poverty and reduce income inequality. We examine this...

In this paper a labor supply model with demand side rationing is estimated to analyze the economic policies that directly affect incentives to work as well as labor costs. The framework is applied to evaluate the employment effects of a federal minimum wage in Germany and the impact of employer-...