Training, Minimum Wage, and Employment. A Simple Dynamic Analysis

Gianni De Fraja

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: The paper presents a model where an increase in minimum wage may determine an increase in employment. The mechanism through which this effect occurs is via effort and training. When minimum wage increases, some of the low paid workers are dismissed, but other are retained and required to work harder. Because they work harder, it is worth their employer's while to train them more. Therefore, when the minimum wage increases, some low paid workers receive better training.

Keywords: MINIMUM WAGE; TRAINING; EMPLOYMENT (search for similar items in EconPapers)
JEL-codes: J23 (search for similar items in EconPapers)
Pages: 25 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:417.98

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