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Minimum Wages and Training Revisited

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  • Neumark, David
  • Wascher, William

Abstract

Theory predicts that minimum wages will reduce employer-provided on-the-job training designed to improve workers' skills on the current job, but it is ambiguous regarding training that workers obtain to qualify for a job. We estimate the effects of minimum wages on both types of training received by young workers, exploiting cross-state variation in minimum wage increases. Much of the evidence supports the hypothesis that higher minimum wages reduce formal training to improve skills on the current job. But there is little or no evidence of offsetting increases in training undertaken to qualify for or obtain jobs. Copyright 2001 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 19 (2001)
Issue (Month): 3 (July)
Pages: 563-95

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Handle: RePEc:ucp:jlabec:v:19:y:2001:i:3:p:563-95

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  1. David Neumark & William Wascher, 2002. "Do Minimum Wages Fight Poverty?," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 315-333, July.
  2. Jill Constantine & David Neumark, 1994. "Training and the Growth of Wage Inequality," NBER Working Papers 4729, National Bureau of Economic Research, Inc.
  3. Oren M. Levin-Waldman, 1996. "The Minimum Wage and the Path Toward a High Wage Economy," Economics Working Paper Archive wp_166, Levy Economics Institute.
  4. Adam J. Grossberg & Paul Sicilian, 1999. "Minimum Wages, On-the-Job Training, and Wage Growth," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 539-556, January.
  5. Rosella Gardecki & David Neumark, 1997. "Order from Chaos? The Effects of Early Labor Market Experiences on Adult Labor Market Outcomes," NBER Working Papers 5899, National Bureau of Economic Research, Inc.
  6. Lang, Kevin, 1987. "Pareto Improving Minimum Wage Laws," Economic Inquiry, Western Economic Association International, vol. 25(1), pages 145-58, January.
  7. Agell, Jonas & Lommerud, Kjell Erik, 1997. "Minimum wages and the incentives for skill formation," Journal of Public Economics, Elsevier, vol. 64(1), pages 25-40, April.
  8. Salop, Joanne & Salop, Steven, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 619-27, November.
  9. Hashimoto, Masanori, 1982. "Minimum Wage Effects on Training on the Job," American Economic Review, American Economic Association, vol. 72(5), pages 1070-87, December.
  10. Alan L. Gustman & Thomas L. Steinmeier, 1980. "Labor Markets and Evaluations of Vocational Training Programs in the Public High Schools - Toward a Framework for Analysis," NBER Working Papers 0478, National Bureau of Economic Research, Inc.
  11. Lynch, Lisa M, 1992. "Private-Sector Training and the Earnings of Young Workers," American Economic Review, American Economic Association, vol. 82(1), pages 299-312, March.
  12. Ronald G. Ehrenberg & Alan J. Marcus, 1982. "Minimum Wages and Teenagers' Enrollment-Employment Outcomes: A Multinomial Logit Model," Journal of Human Resources, University of Wisconsin Press, vol. 17(1), pages 39-58.
  13. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
  14. Ann P. Bartel, 1992. "Training, Wage Growth and Job Performance: Evidence From a Company Database," NBER Working Papers 4027, National Bureau of Economic Research, Inc.
  15. Joanne Salop & Steve Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
  16. Norman Bowers & Paul Swaim, 1994. "Recent Trends In Job Training," Contemporary Economic Policy, Western Economic Association International, vol. 12(1), pages 79-88, 01.
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