The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data

Using data from the National Employer Survey (NES), this study examines the relationship between wages and on-the-job training. Traditional theory argues that workers may finance onthe- job human capital accumulation through lower wages. A binding minimum wage may, therefore, reduce workplace training if it prevents low-wage workers from offering wage cuts to help finance training. Empirical findings in this area have failed to reach a consensus on the training effects of minimum wages. However, previous research has relied primarily on survey data from individual workers, which typically possess poor measures of job training and little information about the characteristics of firms. Unlike previous research, this study addresses the issue of minimum wages and on-the-job training with a unique employer survey. We find strong evidence to suggest that minimum wages are associated with a reduction in the percentage of an establishment’s workforce receiving training, but only weak evidence indicating that minimum wages reduce the average number of hours establishments devote to training activities.

Minimum wages and wage structure in Mexico

Instead of merely setting a lower bound on the wages of formal sector workers, minimum wages serve as a norm for wage setting more generally throughout the Mexican economy. Our results suggest that wages are commonly set at multiples of the minimum wage, and that changes in minimum wages influence wage changes across the occupational distribution. Moreover, our findings suggest that these normative features of minimum wages have their greatest impact on the mid-to-lower tail of the wage distribution, including the informal sector of the economy. Thus, the results lend support to the view that declining real minimum wages and stabilization programs that strengthened the link between wage levels, wage changes, and minimum wages, might account for a portion of the growing wage inequality in Mexico over the period of the late 1980s and early 1990s.wage distributions; minimum wages; wage inequality; Mexico

The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data

Using data from the National Employer Survey (NES), this study examines the relationship between wages and on-the-job training. Traditional theory argues that workers may finance onthe- job human capital accumulation through lower wages. A binding minimum wage may, therefore, reduce workplace training if it prevents low-wage workers from offering wage cuts to help finance training. Empirical findings in this area have failed to reach a consensus on the training effects of minimum wages. However, previous research has relied primarily on survey data from individual workers, which typically possess poor measures of job training and little information about the characteristics of firms. Unlike previous research, this study addresses the issue of minimum wages and on-the-job training with a unique employer survey. We find strong evidence to suggest that minimum wages are associated with a reduction in the percentage of an establishment's workforce receiving training, but only weak evidence indicating that minimum wages reduce the average number of hours establishments devote to training activities

¿Qué hacen los sindicatos en México?

This paper utilizes household and establishment survey data from Mexico to explore the impact of unions on wages, wage inequality, fringe benefits, turnover, job training, productivity, and profits. Mexican unions are statistically significantly associated with these outcome measures for workers and firms. Unions are associated with increased wages, decreased wage inequality, increased fringe benefits per worker, increased job training, and increased productivity per worker. Contrary to the broader literature on union effects, unionized establishments in Mexico experience greater worker turnover. The union association with establishment profit rates is insignificantly different from zero.unions, worker voice, wages, fringe benefits

Introduction to Symposium in Honor of David Gordon

This is a short introduction to the three papers that comprise the symposium.Labor Management Relations; Labor Management; Manufacturing

Do Unionized Employers Reappropriate Rent through Worsened Workplace Safety?

Unionized employers may have an incentive to worsen the quality of working conditions in reaction to union-appropriated monopoly wage rents. Indeed, this is a plausible explanation for why union workers are found to have higher injury rates than their nonunion counterparts. This paper spells out the theoretical conditions under which newly unionized employers will profit from worsening workplace safety and then empirically tests the rent reappropriation hypothesis.Injury; Nonunion; Safety; Union; Unionized; Workplace Safety

Social Stratification, Endogenous Contradictions, and Institutional Change

This paper strengthens the analysis of "endogenous contradictions" found in social structures of accumulation (SSA) theory. It offers a precise definition of the term, spells out why it is that highly stratified societies are prone to contradictions of this sort, and discusses a mechanism by which contradictions lead to crises and, thereby, the need for institutional change. The theoretical framework is applied to the evolution of labor management relations in twentieth century U.S. manufacturing, where it yields new insights into a similar analysis in SSA theory.Labor Management Relations; Labor Management; Manufacturing

Determinants of Changing Informal Employment in Brazil, 2000–2010

This paper explores possible causal determinants of changing wage and salary informality over the period 2000–2010 in Brazil. We utilize demographic census and other institutional data sources from the opening and closing years of the decade, informality regressions in both years that exploit variation across workers and municipalities in informality rates and their causal determinants, and a Blinder-Oaxaca decomposition of changing mean informality rates over the decade. Among the determinants considered are: changes in labor law enforcement, a near doubling of the real value of the minimum wage, the emergence and growth of conditional cash transfer programs, and changing industry composition and labor force demographics. We find that two of the most important policy changes over this period – the increase in the real value of the minimum wage and the dramatic expansion of conditional cash transfer programs – contribute positively, not negatively to informality. Among the factors accounting for the decline in mean informality rates over this time are rising rates of labor law enforcement, rising education levels, increased numbers of workers with spouses in the formal sector, and changes in industry composition, which explain between 16% and 57% of the mean decline in informality over the period. However, most of the decline is accounted for by the changing estimated coefficients on the industry categorical variables – that is, by the changing way in which industrial composition translates into informality

Determinants of Changing Informal Employment in Brazil, 2000–2010

This paper explores possible causal determinants of changing wage and salary informality over the period 2000–2010 in Brazil. We utilize demographic census and other institutional data sources from the opening and closing years of the decade, informality regressions in both years that exploit variation across workers and municipalities in informality rates and their causal determinants, and a Blinder-Oaxaca decomposition of changing mean informality rates over the decade. Among the determinants considered are: changes in labor law enforcement, a near doubling of the real value of the minimum wage, the emergence and growth of conditional cash transfer programs, and changing industry composition and labor force demographics. We find that two of the most important policy changes over this period – the increase in the real value of the minimum wage and the dramatic expansion of conditional cash transfer programs – contribute positively, not negatively to informality. Among the factors accounting for the decline in mean informality rates over this time are rising rates of labor law enforcement, rising education levels, increased numbers of workers with spouses in the formal sector, and changes in industry composition, which explain between 16% and 57% of the mean decline in informality over the period. However, most of the decline is accounted for by the changing estimated coefficients on the industry categorical variables – that is, by the changing way in which industrial composition translates into informality

Minimum wages and wage structure in Mexico

Instead of merely setting a lower bound on the wages of formal sector workers, minimum wages serve as a norm for wage setting more generally throughout the Mexican economy. Our results suggest that wages are commonly set at multiples of the minimum wage, and that changes in minimum wages influence wage changes across the occupational distribution. Moreover, our findings suggest that these normative features of minimum wages have their greatest impact on the mid-to-lower tail of the wage distribution, including the informal sector of the economy. Thus, the results lend support to the view that declining real minimum wages and stabilization programs that strengthened the link between wage levels, wage changes, and minimum wages, might account for a portion of the growing wage inequality in Mexico over the period of the late 1980s and early 1990s