Arabzadeh, Hamzeh; Balleer, Almut; Gehrke, Britta; … - 2023
This paper studies how minimum wages affect the wage distribution if firms face financial constraints. Using German … employer-employee data and firm balance sheets, we document that the within-firm wage dispersion decreases more with higher … model predicts that a higher minimum wage reduces hirings and separations. Firms become more selective such that their …