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

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  • David Fairris

    ()
    (Department of Economics, University of California)

  • Roberto Pedace

    ()
    (Department of Economics, University of Redlands)

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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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 70 (2004)
Issue (Month): 3 (January)
Pages: 566-583

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Handle: RePEc:sej:ancoec:v:70:3:y:2004:p:566-583

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Web page: http://www.southerneconomic.org/
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Cited by:
  1. David Neumark & Olena Nizalova, 2004. "Minimum Wage Effects in the Longer Run," NBER Working Papers 10656, National Bureau of Economic Research, Inc.
  2. Eva Lajtkepová, 2010. "Minimum Wage and Labour Market," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(1), pages 3-20.
  3. Cardoso, Ana Rute, 2009. "Long-Term Impact of Youth Minimum Wages: Evidence from Two Decades of Individual Longitudinal Data," IZA Discussion Papers 4236, Institute for the Study of Labor (IZA).
  4. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
  5. 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.

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