Effect of Minimum Wages on Human Capital Formation
The hypothesis that minimum wages tend to discourage on the job training is largely supported by our empirical analysis. Direct effects on reported job training and corollary effects on wage growth as estimated in microdata of the National Longitudinal Samples (NLS) and Michigan Income Dynamics (MID) are consistently negative and stronger at lower education levels. Apart from a single exception, no effects are observable among the higher wage group whose education exceeds high school. The effects on job turnover are: a decrease in turnover among young NLS whites, but an increase among young NLS blacks and MID whites. Whether these apparently conflicting findings on turnover reflect a distinction between short and long run adjustments in jobs is a question that requires further testing.
|Date of creation:||Feb 1980|
|Date of revision:|
|Publication status:||published as Mincer, Jacob and Leighton, Linda. "Effect of Minimum Wages on Human Capital Formation." The Economy of Legal Minimum Wages, edited by S. Rottenberg. Washington, D.C.: American Enterprise Institute, 1981.|
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- Jacob Mincer & Boyan Jovanovic, 1979.
"Labor Mobility and Wages,"
NBER Working Papers
0357, National Bureau of Economic Research, Inc.
- Michael L. Wachter & Choongsoo Kim, 1979. "Time Series Changes in Youth Joblessness," NBER Working Papers 0384, National Bureau of Economic Research, Inc.
- Robert Swidinsky, 1980. "Minimum Wages and Teenage Unemployment," Canadian Journal of Economics, Canadian Economics Association, vol. 13(1), pages 158-71, February.
- J. Wilson Mixon & Jr, 1978. "The minimum wage and voluntary labor mobility," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 32(1), pages 67-73, October.
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