Effect of Minimum Wages on Human Capital Formation

28 Pages Posted: 1 Mar 2001 Last revised: 17 Sep 2010

See all articles by Jacob Mincer

Jacob Mincer

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Linda S. Leighton

Fordham University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 1980

Abstract

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.

Suggested Citation

Mincer, Jacob and Leighton, Linda S., Effect of Minimum Wages on Human Capital Formation (February 1980). NBER Working Paper No. w0441. Available at SSRN: https://ssrn.com/abstract=262064

Jacob Mincer (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
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212-854-3676 (Phone)
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National Bureau of Economic Research (NBER)

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Linda S. Leighton

Fordham University - Department of Economics ( email )

Bronx, NY 10458
United States
(718) 817-4054 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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