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The effects of minimum wages on firm-financed apprenticeship training

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  • Schumann, Mathias

Abstract

This study analyzes the short-term effects of the minimum wage introduction on firm-provided apprenticeship training in the main construction sector in Germany. While the minimum wage was binding for regular blue-collar workers, apprentices were exempt. The analysis is based on a large administrative firm-level data set. The results of difference-in-differences and synthetic control estimations show that the minimum wage decreased both a firm's likelihood to train new apprentices and number of new apprentices. This study provides evidence that minimum wages deter firms from financing training in general skills when labor turnover is high and that firm training is a minimum wage channel of adjustment.

Suggested Citation

  • Schumann, Mathias, 2017. "The effects of minimum wages on firm-financed apprenticeship training," Labour Economics, Elsevier, vol. 47(C), pages 163-181.
    • Handle: RePEc:eee:labeco:v:47:y:2017:i:c:p:163-181
    DOI: 10.1016/j.labeco.2017.05.002
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    Cited by:

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    2. Bossler, Mario & Gürtzgen, Nicole & Lochner, Benjamin & Betzl, Ute & Feist, Lisa, 2018. "The German minimum wage: Effects on business expectations, profitability, and investments," FAU Discussion Papers in Economics 13/2018, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    3. Carolin Linckh & Caroline Neuber-Pohl & Harald Pfeifer, 2023. "The employment effects of raising negotiated minimum wages for apprentices," Economics of Education Working Paper Series 0202, University of Zurich, Department of Business Administration (IBW).
    4. Gregory, Terry & Zierahn, Ulrich, 2020. "When the Minimum Wage Really Bites Hard: Impact on Top Earners and Skill Supply," IZA Discussion Papers 13633, Institute of Labor Economics (IZA).
    5. Müller Dana & Wolter Stefanie, 2020. "German labour market data – Data provision and access for the international scientific community," German Economic Review, De Gruyter, vol. 21(3), pages 313-333, September.
    6. Wei, Zhihua & Ren, Zerong & Zhu, Caiyun & Zhou, Yisihong & Liu, Xiaowen, 2023. "Minimum wage effects on firms’ R&D investment: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 87(C), pages 287-305.
    7. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    8. Hara, Hiromi, 2017. "Minimum wage effects on firm-provided and worker-initiated training," Labour Economics, Elsevier, vol. 47(C), pages 149-162.
    9. Bossler Mario & Gürtzgen Nicole & Lochner Benjamin & Betzl Ute & Feist Lisa, 2020. "The German Minimum Wage: Effects on Productivity, Profitability, and Investments," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 321-350, April.
    10. Jonathan Meer & Hedieh Tajali, 2023. "Effects of the Minimum Wage on the Nonprofit Sector," NBER Working Papers 31281, National Bureau of Economic Research, Inc.
    11. Vigtel, Trond Christian, 2018. "The retirement age and the hiring of senior workers," Labour Economics, Elsevier, vol. 51(C), pages 247-270.
    12. Gregory, Terry & Zierahn, Ulrich, 2022. "When the minimum wage really bites hard: The negative spillover effect on high-skilled workers," Journal of Public Economics, Elsevier, vol. 206(C).
    13. Sofie Cabus & Eszter Nagy, 2021. "On the productivity effects of training apprentices in Hungary: evidence from a unique matched employer–employee dataset," Empirical Economics, Springer, vol. 60(4), pages 1685-1718, April.

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    More about this item

    Keywords

    Minimum wage; Firm-financed training; Apprenticeship training; Difference-in-differences; Synthetic control;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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