This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Work-related Training and the New National Minimum Wage in Britain

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Arulampalam, Wiji (University of Warwick)
Alison L Booth
Mark L Bryan

Additional information is available for the following registered author(s):

Abstract

In this paper we use important new training and wage data from the British Household Panel Survey to estimate the impact of the national minimum wage (introduced in April 1999) on the work-related training of low-wage workers. We use two 'treatment groups' for estimating the impact of the new minimum wage those workers who explicitly stated they were affected by the new minimum and those workers whose derived 1998 wages were below the minimum. Using difference-in-differences techniques for the period 1998 to 2000, we find no evidence that the introduction of the minimum wage reduced the training of affected workers, and some evidence that it increased it. In particular we find a significant positive effect of about 8 to 11% for affected workers. Consequently our findings can be interpreted as providing no evidence in support of the orthodox human capital model as it applies to work-related training, and some evidence in support of the new theories based on imperfectly competitive labour markets. Our estimates also suggest that two of the goals of the UK government: improving wages of the low paid and developing their skills have been compatible, at least for the introductory rates of the national minimum wage.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://repec.org/res2003/Arulampalam1.pdf
File Format:
File Function: full text
Download Restriction: no

Publisher Info
Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 9.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 04 Jun 2003
Date of revision:
Handle: RePEc:ecj:ac2003:9

Contact details of provider:
Web page: http://www.res.org.uk/society/annualconf.asp
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords: minimum wages; human capital; work-related training; difference-in-differences estimation;

Other versions of this item:

Find related papers by JEL classification:
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Neumark, David & Wascher, William, 2001. "Minimum Wages and Training Revisited," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 563-95, July. [Downloadable!] (restricted)
    Other versions:
  2. 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.
  3. Stevens, Margaret, 1994. "A Theoretical Model of On-the-Job Training with Imperfect Competition," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 537-62, October. [Downloadable!] (restricted)
  4. Stewart, Mark B., 2002. "The Impact of the Introduction of the UK Minimum Wage on the Employment Probabilities of Low Wage Workers," Royal Economic Society Annual Conference 2002 169, Royal Economic Society. [Downloadable!]
    Other versions:
  5. Acemoglu, Daron & Pischke, Jörn-Steffen, 2001. "Minimum Wages and On-the-Job Training," IZA Discussion Papers 384, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June. [Downloadable!] (restricted)
    Other versions:
  7. Stewart, Mark B, 1990. "Union Wage Differentials, Product Market Influences and the Division of Rents," Economic Journal, Royal Economic Society, vol. 100(403), pages 1122-37, December. [Downloadable!] (restricted)
    Other versions:
  8. Chang, Chun & Wang, Yijiang, 1996. "Human Capital Investment under Asymmetric Information: The Pigovian Conjecture Revisited," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 505-19, July. [Downloadable!] (restricted)
  9. V. Bhaskar & Alan Manning & Ted To, 2002. "Oligopsony and Monopsonistic Competition in Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 155-174, Spring. [Downloadable!] (restricted)
  10. Hashimoto, Masanori, 1982. "Minimum Wage Effects on Training on the Job," American Economic Review, American Economic Association, vol. 72(5), pages 1070-87, December. [Downloadable!] (restricted)
  11. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August. [Downloadable!] (restricted)
  12. Booth, Alison L & Zoega, Gylfi, 1999. "Do Quits Cause Under-Training?," Oxford Economic Papers, Oxford University Press, vol. 51(2), pages 374-86, April.
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jorn-Steffen Pischke, 2004. "Labor Market Institutions, Wages, and Investment," NBER Working Papers 10735, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Bassanini, Andrea & Brunello, Giorgio, 2003. "Is Training More Frequent When Wage Compression Is Higher? Evidence from the European Community Household Panel," IZA Discussion Papers 839, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Steinar Holden & V. Bhaskar, 2003. "Wage Differentiation via Subsidised General Training," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. repec:ese:iserwp: is not listed on IDEAS
  5. Dustmann; Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? Over five million full texts a year are downloaded through IDEAS.

This page was last updated on 2009-11-25.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.