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The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data

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  • David Fairris
  • Roberto Pedace

Abstract

Human capital theory suggests that workers may finance on‐the‐job training by accepting lower wages during the training period, Minimum wage laws could reduce job training, then, to the extent they prevent low‐wage workers from offering sufficient wage cuts to finance training. Empirical findings on the relationship between minimum wages and job training have failed to reach a consensus. Previous research has relied primarily on survey data from individual workers that typically lack both detailed measures of job training and important information about the characteristics of firms. This study addresses the issue of minimum wages and on‐the‐job training with a unique employer survey. We find no evidence indicating that minimum wages reduce the average hours of training of trained employees and little to suggest that minimum wages reduce the percentage of workers receiving training.

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  • David Fairris & Roberto Pedace, 2004. "The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data," Southern Economic Journal, John Wiley & Sons, vol. 70(3), pages 566-583, January.
    • Handle: RePEc:wly:soecon:v:70:y:2004:i:3:p:566-583
    DOI: 10.1002/j.2325-8012.2004.tb00589.x
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    2. Hristos Doucouliagos & Katarina Zigova, 2024. "Minimum Wages and Human Capital Investment: A Meta-Regression Analysis," Economics of Education Working Paper Series 0219, University of Zurich, Department of Business Administration (IBW).
    3. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    4. David Neumark & Olena Nizalova, 2007. "Minimum Wage Effects in the Longer Run," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    5. Grimshaw, Damian., 2011. "What do we know about low wage work and low wage workers? : Analysing the definitions, patterns, causes and consequences in international perspective," ILO Working Papers 994648583402676, International Labour Organization.
    6. Cardoso, Ana Rute, 2009. "Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data," IZA Discussion Papers 4236, Institute of Labor Economics (IZA).
    7. Koch, Andreas & Kirchmann, Andrea & Reiner, Marcel & Scheu, Tobias & Zühlke, Anne & Bonin, Holger, 2020. "Verhaltensmuster von Betrieben und Beschäftigten im Kontext des gesetzlichen Mindestlohns," IZA Research Reports 97, Institute of Labor Economics (IZA).
    8. David Neumark, 2009. "Alternative Labor Market Policies to Increase Economic Self-Sufficiency: Mandating Higher Wages, Subsidizing Employment, and Increasing Productivity," NBER Working Papers 14807, National Bureau of Economic Research, Inc.
    9. Colin M Mason & Sara Carter & Stephen K Tagg, 2006. "The Effect of the National Minimum Wage on the UK Small Business Sector: A Geographical Analysis," Environment and Planning C, , vol. 24(1), pages 99-116, February.

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