Program > Program by speaker > Blömer Maximilian

Estimating an Equilibrium Job Search Model for the German Labour Market
Maximilian Blömer  1, *@  , Nicole Guertzgen  2, 3@  , Laura Pohlan  4, 1@  , Holger Stichnoth  1@  , Gerard Van Den Berg  4@  
1 : Centre for European Economic Research  (ZEW)  -  Website
Centre for European Economic Research L 7, 1 68161 Mannheim -  Germany
2 : Universität Regensburg - UR (GERMANY)
3 : IAB Nuremberg  (IAB)
4 : University of Mannheim
* : Corresponding author

In this study, we estimate an econometric structural equilibrium search model to ex-ante simulate the introduction of a uniform minimum wage in the German labour market. We use the model to gain a better understanding about the magnitude of search frictions and, thus, the extent of employers' market power in the German low-wage sector. To accommodate a wide range of employment responses, we estimate a variant of the model by Bontemps et. al (1999), which allows for negative, zero or positive employment effects. We take the model to large-scale administrative German data, and validate our estimations by comparing our predictions to the results from quasi-experimental studies on the introduction and changes in sectoral minimum wages. We then use the model to conduct a variety of policy simulations, including the systematic variation of general minimum wages over a large range of values.


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