We use data on the experiences of newly hired workers from the 1982 Employment Opportunity Pilot Project and two nationwide surveys that we designed and conducted under contract with the U.S. Small Business Administration in 1992 and 2001 to examine the effects of minimum wages on training. We observe the incidence and number of hours of formal and informal training received in the first three months of employment by the most recent worker hired in an establishment. This provides us with a sample of roughly 4,000 newly hired workers from the 1970's into the early 2000's. We identify the minimum wage effect on training using variation in the national minimum wage over time and state-to-state variation in minimum wages that exceed the national minimum. Unlike previous studies, the use of newly hired workers along with the date and place of hire allows us to precisely measure the timing of the training received and the relevant minimum wage. Before controlling for year effects, we find significant negative effects of increases in the minimum wage on the incidence and hours of formal training. However, after controlling for year effects, increases in the minimum wage positively but insignificantly affect incidence and hours of formal training. On the other hand, the negative effects of increases in the minimum wage on informal training remain after controlling for year effects. |
