IDEAS home Printed from https://ideas.repec.org/p/iaa/dpaper/201708.html
   My bibliography  Save this paper

Minimum Wages and Vocational Training Incentives in Germany

Author

Listed:
  • Kim Leonie Kellermann

    () (University of Münster, Center for Interdisciplinary Economics, Münster, Germany)

Abstract

We examine the impact of sector-specific minimum wages in Germany on the willingness of youths to undergo vocational training. The theoretical intuition on the impact of wage floors on education is ambiguous. On the one hand, they raise the opportunity cost of education and prevent further skill accumulation. On the other hand, they lower the employment probability of unskilled workers, promoting additional training. Employing a mixed logit model, we estimate the probability of opting for an apprenticeship for a GSOEP-based sample of youths aged 17 to 24. Unlike the evidence from other countries, we find that increasing sectoral wage floors have a positive effect on training probabilities. Due to binding minimum wages, the demand for unskilled workers declines which lowers the opportunity cost of education. High requirements with regard to professional skills reinforce the effect.

Suggested Citation

  • Kim Leonie Kellermann, 2017. "Minimum Wages and Vocational Training Incentives in Germany," IAAEU Discussion Papers 201708, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
  • Handle: RePEc:iaa:dpaper:201708
    as

    Download full text from publisher

    File URL: http://iaaeu.de/images/DiscussionPaper/2017_08.pdf
    File Function: First version, 2017
    Download Restriction: no

    More about this item

    Keywords

    Minimum wages; education; vocational training; occupational choice; discrete choice;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iaa:dpaper:201708. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adrian Chadi). General contact details of provider: http://edirc.repec.org/data/iaaegde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.