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The effects of minimum wages on firm-financed apprenticeship training

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  • Schumann, Mathias

Abstract

This study analyzes the short-term effects of the minimum wage introduction on firm-provided apprenticeship training in the main construction sector in Germany. While the minimum wage was binding for regular blue-collar workers, apprentices were exempt. The analysis is based on a large administrative firm-level data set. The results of difference-in-differences and synthetic control estimations show that the minimum wage decreased both a firm's likelihood to train new apprentices and number of new apprentices. This study provides evidence that minimum wages deter firms from financing training in general skills when labor turnover is high and that firm training is a minimum wage channel of adjustment.

Suggested Citation

  • Schumann, Mathias, 2017. "The effects of minimum wages on firm-financed apprenticeship training," Labour Economics, Elsevier, vol. 47(C), pages 163-181.
  • Handle: RePEc:eee:labeco:v:47:y:2017:i:c:p:163-181
    DOI: 10.1016/j.labeco.2017.05.002
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    Cited by:

    1. Bossler, Mario & Gürtzgen, Nicole & Lochner, Benjamin & Betzl, Ute & Feist, Lisa & Wegmann, Jakob, 2018. "Auswirkungen des gesetzlichen Mindestlohns auf Betriebe und Unternehmen," IAB-Forschungsbericht 201804, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Terry Gregory & Ulrich Zierahn, 2020. "When the Minimum Wage Really Bites Hard: Impact on Top Earners and Skill Supply," CESifo Working Paper Series 8540, CESifo.
    3. Hara, Hiromi, 2017. "Minimum wage effects on firm-provided and worker-initiated training," Labour Economics, Elsevier, vol. 47(C), pages 149-162.
    4. Bossler, Mario & Gürtzgen, Nicole & Lochner, Benjamin & Betzl, Ute & Feist, Lisa, 2018. "The German minimum wage: Effects on business expectations, profitability, and investments," FAU Discussion Papers in Economics 13/2018, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    5. Bossler Mario & Gürtzgen Nicole & Betzl Ute & Feist Lisa & Lochner Benjamin, 2020. "The German Minimum Wage: Effects on Productivity, Profitability, and Investments," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(2-3), pages 321-350, April.
    6. Müller Dana & Wolter Stefanie, 2020. "German labour market data – Data provision and access for the international scientific community," German Economic Review, De Gruyter, vol. 21(3), pages 313-333, September.
    7. Vigtel, Trond Christian, 2018. "The retirement age and the hiring of senior workers," Labour Economics, Elsevier, vol. 51(C), pages 247-270.
    8. Gregory, Terry & Zierahn, Ulrich, 2022. "When the minimum wage really bites hard: The negative spillover effect on high-skilled workers," Journal of Public Economics, Elsevier, vol. 206(C).
    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-financed training; Apprenticeship training; Difference-in-differences; Synthetic control;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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