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Minimum wage non-compliance: the role of co-determination
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| Authors and Corporations: | , |
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| Other Authors: | Pannenberg, Markus 1964- [Author] |
| Type of Resource: | E-Book |
| Language: | English |
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| Series: |
Deutsches Institut für Wirtschaftsforschung: SOEP papers on multidisciplinary panel data research ; 1199 (2023)
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| Subjects: | |
| Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| Summary: | We analyse in what way co-determination affects non-compliance with the German minimum wage, which was introduced in 2015. The Works Constitution Act (WCA), the law regulating co-determination at the plant level, provides works councils with indirect means to ensure compliance with the statutory minimum wage. Based on this legal situation, our theoretical model predicts that non-compliance is less likely in co-determined firms because works councils enhance the enforcement of the law. The economic correlates of co-determination, such as higher productivity and wages, affect non-compliance in opposite directions. The empirical analysis, using data from the German Socio-economic Panel (SOEP) for the years 2016 and 2019, demonstrates that non-compliance occurs less often for employees in co-determined establishments, while there is no impact on the difference between the minimum wage and the amount, which was actually paid. Therefore, co-determination helps to secure the payment of minimum wages. |
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| Physical Description: | 1 Online-Ressource (circa 38 Seiten) |