Skip to content

Book Chapter Inequality and poverty re-examined 12

Minimum Wages, Training and the Distribution of Earnings

Authors

Editors

Stephen P. Jenkins and John Micklewright

Publication date

01 Aug 2007

Abstract

In this chapter we highlight the relevance of work-related training to the minimum wage debate. We initially situate training incidence within the broader picture of the earnings distribution in Britain and demonstrate that lower-paid workers are less likely than workers towards the top of the hourly wage distribution to receive work-related training. We then show that work-related training is potentially important from a distributional standpoint, since it significantly increases individuals' longer-term earning prospects. Next we report empirical results indicating that the introduction in 1999 of a national minimum wage in Britain had a small but statistically significant positive effect on subsequent training incidence for affected workers. In conclusion, we note that the available empirical evidence for Britain shows that minimum wages (i) are associated with a small increase in work-related training for the low paid and (ii) have not adversely affected the employment of British workers. We therefore suggest that the minimum wage has the potential to reduce wages inequality in the longer-term provided that it continues to be set at a level that does not threaten employment. This potential arises not just because of the direct and obvious effect of a minimum wage in increasing wages at the bottom of the distribution, but also through its more indirect effect on work-related training.

Notes

Ch. not on CSText. Book in ISER library

#517190


Research home

Research home

News

Latest findings, new research

Publications search

Search all research by subject and author

Podcasts

Researchers discuss their findings and what they mean for society

Projects

Background and context, methods and data, aims and outputs

Events

Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report

Themes

Key research themes and areas of interest