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Minimum-Wage Effects on Human Capital Accumulation: Evidence from Canadian Data

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  • Diana Alessandrini
  • Joniada Milla

Abstract

We investigate the effect of the minimum wage on individuals’ postsecondary schooling decisions. Using Canadian longitudinal data, we explore 136 minimum-wage amendments and find three novel results. First, the minimum wage affects both the quantity and type of human capital acquired by students. A 10% increase in the minimum wage increases community-college enrollment by 6.2% but reduces university enrollment by 6.5%. Second, high minimum wages widen the university participation gap between individuals with different levels of parental education. Finally, minimum-wage hikes encourage workers who recently separated from their jobs to return to postsecondary education as mature students.

Suggested Citation

  • Diana Alessandrini & Joniada Milla, 2024. "Minimum-Wage Effects on Human Capital Accumulation: Evidence from Canadian Data," Journal of Human Capital, University of Chicago Press, vol. 18(2), pages 346-376.
    • Handle: RePEc:ucp:jhucap:doi:10.1086/728084
    DOI: 10.1086/728084
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    3. 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).

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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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