Minimum Wages, On‐the‐Job Training, and Wage Growth

Abstract

Using data from the Employment Opportunities Pilot Project, we examine the relationships between minimum wages, wage growth, and on‐the‐job training. We find that minimum wage jobs exhibit less wage growth than other jobs, particularly for men. We find no evidence, however, of a unique minimum wage effect on training opportunities. We conclude that indirect methods of proxying training with wage growth can be misleading as they fail to distinguish whether the reduced wage growth of workers on minimum wage jobs results from their receiving less training than other workers or whether it is strictly a result of the wage determination process.