What is the optimal minimum wage?

The European Commission advocates an adequate minimum wage, which could be 60% of the median wage. A recent independent report published by the UK’s HM Treasury recommends a similar level. Germany’s Minister of Labour and Social Affairs has committed to a minimum wage of €12 per hour and the Raise the Wage Act would increase the U.S. federal minimum wage from $7.25 to $15 per hour by 2025. Gabriel Ahlfeldt, Duncan Roth, and Tobias Seidel explore whether such ambitious minimum wage increases improve the living conditions of low-wage workers as advocated by proponents, or lead to massive job loss as feared by opponents.