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Mind the Gap

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Author Info

  • Paul Gregg
  • Jonathan Wadsworth

Abstract

Britain, perhaps uniquely, has experienced simultaneoud rises in both wage inequality and polarisation of eployment across households over the past twenty years. This article investigates the inter-relations of these two trends by examining the changing nature of new jobs and the characteristics of the individuals who fill them. One of the principal reasons why new jobs are increasingly taken by individuals with partners in work is the low wages associated with these jobs. Using a simple matching framework, a rising share of bad, low quality, jobs in the stock of entry jobs can be shown to be consistent with a positive labour supply shock, rising separation rates, cost or productivity shocks, all of which have hit Britain, to some degree, over the past fifteen years. Using household survey data, the paper shows that real entry wages have fallen relative to the wages of those in other jobs. Entry jobs are dominated by high turnover forms of employment, part-time, temporary working and self-employment. Low wage/high turnover forms of working are less likely to be filled by those from workless households. Rising wage inequality re-enforces employment polarisation.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0303.

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Date of creation: Aug 1996
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Handle: RePEc:cep:cepdps:dp0303

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Cited by:
  1. Hartmut Lehmann & Jonathan Wadsworth & Alessandro Acquisti, 1998. "Grime and punishment: job insecurity and wage arrears in the Russian Federation," LSE Research Online Documents on Economics 20251, London School of Economics and Political Science, LSE Library.
  2. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, vol. 41(3-5), pages 647-657, April.
  3. Manning, Alan, 2000. " Pretty Vacant: Recruitment in Low-Wage Labour Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(0), pages 747-70, Special I.
  4. Hartmut Lehmann & Jonathan Wadsworth, 1996. "New Jobs, Worklessness and Households in Poland," Economics Technical Papers 966, Trinity College Dublin, Department of Economics.
  5. Santos, Miguel, 2010. "From Training to Labour Market. Holocletic Model," MPRA Paper 26617, University Library of Munich, Germany.

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