Work-Related Training and the New National Minimum Wage in Britain
Wiji Arulampalam (),
Alison Booth () and
Mark Bryan ()
No 595, IZA Discussion Papers from Institute of Labor Economics (IZA)
In this paper we use important new training and wage data from the British Household Panel Survey to estimate the impact of the national minimum wage (introduced in April 1999) on the work-related training of low-wage workers. We use two ‘treatment groups’ for estimating the impact of the new minimum wage – those workers who explicitly stated they were affected by the new minimum and those workers whose derived 1998 wages were below the minimum. Using difference-in-differences techniques for the period 1998 to 2000, we find no evidence that the introduction of the minimum wage reduced the training of affected workers, and some evidence that it increased it. In particular we find a significant positive effect of about 8 to 11% for affected workers. Consequently our findings can be interpreted as providing no evidence in support of the orthodox human capital model as it applies to work-related training, and some evidence in support of the new theories based on imperfectly competitive labour markets. Our estimates also suggest that two of the goals of the UK government – improving wages of the low paid and developing their skills – have been compatible, at least for the introductory rates of the national minimum wage.
Keywords: difference-in-differences estimation; minimum wages; human capital; work-related training (search for similar items in EconPapers)
JEL-codes: J24 J31 J41 (search for similar items in EconPapers)
Pages: 47 pages
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed
Published - summary of main results published in: Economic Journal, 2004, 114 (494), C87-C94
Downloads: (external link)
Journal Article: Training and the new minimum wage (2004)
Working Paper: Work-related Training and the New National Minimum Wage in Britain (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp595
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().