Although there is a large literature on the economic effects of minimum wages on labour market outcomes (especially employment), there is hardly any evidence on their impact on firm performance. This is surprising: minimum wages appear to have a significant impact on wages, but only a limited...

Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if cultural diversity affects total factor productivity. We distinguish diversity in the establishment's workforce and in the aggregate regional labor force where the plant is...