Abstract
In view of rising poverty rates, the introduction of a legal minimum wage has become an important policy issue in Germany. We analyze the distributional effects of a nationwide minimum wage of 7.50e per hour based on a micro-simulation model accounting for interactions between wages, the tax-benefit system, and net household incomes. Due to the existing system of means-tested income support, the minimum wage would be ineffective in reducing poverty in the overall population, although poverty among singles and families with children or with a female household head would be slightly reduced.
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