Effects of a General Minimum Wage in Austria

The study analyses the impact of the implementation of a general minimum wage in Austria of 1,500 € or 1,700 € per month. First, we calculate the effects on personal and household incomes and their distribution. Second, we simulate the macroeconomic impact. We find that implementation of a minimum wage affects a broad group of employees, in particular at the lower margin of the income distribution, and increases their income substantially. The number of households at risk of poverty decreases markedly. The macroeconomic effects on production and employment are, however, limited.