We model annual low pay transition probabilities taking account of three potentially endogenous selections: two sample drop-out mechanisms (panel attrition, non-employment) and ‘initial conditions’ (base-year low pay status). This model, and variants that ignore one or more of these selection mechanisms, are fitted to data for men from the British Household Panel Survey. Tests of the ignorability of the endogenous selection mechanisms suggest that ‘economic’ selection mechanisms such as initial conditions and retention of employment are more important than the ‘survey’ selection mechanism (attrition). However, consistent with related US research, relatively simple models provide estimates of covariate effects that differ little from the estimates from the complicated models.
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number
CESifo Working Paper No. 1232.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Stewart, Mark B & Swaffield, Joanna K, 1999.
"Low Pay Dynamics and Transition Probabilities,"
Economica,
London School of Economics and Political Science, vol. 66(261), pages 23-42, February.
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