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Minimum wage effects on firm-provided and worker-initiated training

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  • Hara, Hiromi

Abstract

This study examined the effects of minimum wages on formal and informal firm-provided training and worker-initiated training in Japan. Economic theory predicts that a minimum wage increase will adversely affect firm-provided training, and while we found that this effect was indeed observed on formal training, with a 1% increase in the minimum wage causing a 2.8% decline in the formal training of workers affected by minimum wage increases, no statistically significant decrease occurred with informal training. Further, although workers can potentially increase their self-learning activities to compensate for any decrease in skill development opportunities in the workplace, we found that an increase in the minimum wage did not increase worker-initiated training. Therefore, the overall effect of an increase in the minimum wage was a decrease in skill development among those workers affected by minimum wages.

Suggested Citation

  • Hara, Hiromi, 2017. "Minimum wage effects on firm-provided and worker-initiated training," Labour Economics, Elsevier, vol. 47(C), pages 149-162.
    • Handle: RePEc:eee:labeco:v:47:y:2017:i:c:p:149-162
    DOI: 10.1016/j.labeco.2017.05.011
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    1. Moretti, Luca & Mayerl, Martin & Mühlemann, Samuel & Schlögl, Peter & Wolter, Stefan C., 2017. "So Similar and Yet So Different: A Comparative Analysis of a Firm's Cost and Benefits of Apprenticeship Training in Austria and Switzerland," IZA Discussion Papers 11081, Institute of Labor Economics (IZA).
    2. Koichi Fukumura & Atsushi Yamagishi, 2020. "Minimum wage competition," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(6), pages 1557-1581, December.
    3. Luca Moretti & Martin Mayerl & Samuel Muehlemann & Peter Schloegl & Stefan C. Wolter, 2017. "So similar and yet so different: A comparative analysis of a firm's net costs and post-apprenticeship training benefits in Austria and Switzerland," Economics of Education Working Paper Series 0137, University of Zurich, Department of Business Administration (IBW), revised Apr 2018.
    4. Lu Zhang & Xiaochao Guo & Zhimei Lei & Ming K. Lim, 2019. "Social Network Analysis of Sustainable Human Resource Management from the Employee Training’s Perspective," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    5. Yamagishi, Atsushi, 2019. "Minimum Wages and Housing Rents: Theory and Evidence from Two Countries," MPRA Paper 94238, University Library of Munich, Germany.
    6. Alessandrini, Diana & Milla, Joniada, 2021. "Minimum Wage Effects on Human Capital Accumulation: Evidence from Canadian Data," IZA Discussion Papers 14178, Institute of Labor Economics (IZA).
    7. Yamagishi, Atsushi, 2021. "Minimum wages and housing rents: Theory and evidence," Regional Science and Urban Economics, Elsevier, vol. 87(C).
    8. Okudaira, Hiroko & Takizawa, Miho & Yamanouchi, Kenta, 2019. "Minimum wage effects across heterogeneous markets," Labour Economics, Elsevier, vol. 59(C), pages 110-122.
    9. Sofie Cabus & Eszter Nagy, 2021. "On the productivity effects of training apprentices in Hungary: evidence from a unique matched employer–employee dataset," Empirical Economics, Springer, vol. 60(4), pages 1685-1718, April.

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    More about this item

    Keywords

    Minimum wage; Firm-provided training; Worker-initiated training;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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