Impact of the introduction of the legal minimum wage in Germany on training opportunities on the workplace

The dissertation examines training outcomes of the legal minimum wage in Germany. Human capital and labor market segmentation theories, labor economic approach constitute the framework of the analysis. We employ a quasi-experimental research design using German Socio- Economic Panel 2014-2016. In the dependent variable, we differentiate between training incidence and intensity. Firm-level, individual-level job-related, performance-related and personal characteristics are introduced as regressors. For the treatment assignment, we use a subjective assessment upon the branch tariff adjustment to differentiate between employees who have received a pay raise within the juridically prescribed period and those covered by anticipatory wage adjustments. The analysis is performed using Random Effects Logit and First Differences Regression models and followed by robustness check in the variety of post-estimation procedures. Our findings prove the fact that it is the wage adjustment point, and not the absolute sum of the income, that regulate human capital investments on the examined labor market. The results imply that the law introduction has a differentiated positive impact on training participation of the affected workers, specified by the choice of the outcome indicator. In particular, we find no statistically significant trends for the training incidence. Second, our findings imply that the announcement upon the law introduction induces an increase in the employer-financed training incidence and an upward adjustment in the number of enrollments afterwards. Finally, the data provides evidences that upcoming training costs are potentially absorbed by the negative shifts in training volume. The current research empirically contributes to the existing literature of the emerging minimum wage research in Germany, draws attention to the problematics of a tight connection between labor market and education inequalities, and specifies selected aspects of training participation.


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