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


  • David Fairris

    () (Department of Economics, University of California)

  • Roberto Pedace

    () (Department of Economics, University of Redlands)


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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  • David Fairris & Roberto Pedace, 2004. "The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data," Southern Economic Journal, Southern Economic Association, vol. 70(3), pages 566-583, January.
  • Handle: RePEc:sej:ancoec:v:70:3:y:2004:p:566-583

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    References listed on IDEAS

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    Cited by:

    1. Grimshaw, Damian., 2011. "What do we know about low wage work and low wage workers? : Analysing the definitions, patterns, causes and consequences in international perspective," ILO Working Papers 994648583402676, International Labour Organization.
    2. repec:eee:labeco:v:47:y:2017:i:c:p:149-162 is not listed on IDEAS
    3. Eva Lajtkepová, 2010. "Minimum Wage and Labour Market," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(1), pages 3-20.
    4. HARA Hiromi, 2015. "The Effects of Minimum Wages on Training," Discussion papers 15075, Research Institute of Economy, Trade and Industry (RIETI).
    5. Tobias Haepp & Carl Lin, 2017. "How Does the Minimum Wage Affect Firm Investments in Fixed and Human Capital? Evidence from China," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1057-1080, November.
    6. 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).
    7. Papps, Kerry L., 2014. "Career Wage Profiles and the Minimum Wage," IZA Discussion Papers 8421, Institute for the Study of Labor (IZA).
    8. Yanick Labrie & Claude Montmarquette, 2005. "La formation qualifiante et transférable en milieu de travail," CIRANO Project Reports 2005rp-04, CIRANO.
    9. 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.
    10. David Neumark & Olena Nizalova, 2007. "Minimum Wage Effects in the Longer Run," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    11. repec:eee:labeco:v:47:y:2017:i:c:p:163-181 is not listed on IDEAS
    12. Mussaddeq Chowdhury & Roberto Pedace, 2007. "Ethnic Enclaves And Labor Markets: An Analysis Of Immigrant Outcomes In California," Contemporary Economic Policy, Western Economic Association International, vol. 25(2), pages 238-249, April.

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