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

Hiromi Hara

Labour Economics, 2017, vol. 47, issue C, 149-162

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.

Keywords: Minimum wage; Firm-provided training; Worker-initiated training (search for similar items in EconPapers)
JEL-codes: J24 J39 J08 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:labeco:v:47:y:2017:i:c:p:149-162