Training, Minimum Wage, and Employment. A Simple Dynamic Analysis

The paper presents a model where an increase in minimum wage may determine an increase in employment. The mechanism through which this effect occurs is via effort and training. When minimum wage increases, some of the low paid workers are dismissed, but other are retained and required to work harder. Because they work harder, it is worth their employer's while to train them more. Therefore, when the minimum wage increases, some low paid workers receive better training.