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Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions

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Author Info
Lorenzo Cappellari ()
Stephen P. Jenkins ()

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Abstract

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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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1232.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1232

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Related research
Keywords: transition probabilities; low pay; attrition; non-response; ignorability;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

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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.:
  1. 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. [Downloadable!] (restricted)
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  2. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling low income transitions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(5), pages 593-610. [Downloadable!]
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  3. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    Other versions:
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Cited by:
(explanations, 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.)

  1. Melanie K. Jones & Richard J. Jones & Philip D. Murphy & Peter J. Sloane, 2007. "A Persistence Model of the National Minimum Wage," IZA Discussion Papers 2595, Institute for the Study of Labor (IZA). [Downloadable!]
  2. repec:ese:iserwp: is not listed on IDEAS
  3. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2006. "Modelling poverty by not modelling poverty: An application of a simultaneous hazards approach to the UK," CASE Papers /106, Centre for Analysis of Social Exclusion, LSE. [Downloadable!]
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  4. Arne Uhlendorff, 2006. "From No Pay to Low Pay and Back Again?: A Multi-State Model of Low Pay Dynamics," Discussion Papers of DIW Berlin 648, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  5. Mélise Jaud & Olivier Cadot & Akiko Suwa-Eisenmann, 2009. "Do food scares explain supplier concentration? An analysis of EU agri-food imports," PSE Working Papers 2009-28, PSE (Ecole normale supérieure). [Downloadable!]
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This page was last updated on 2009-12-14.


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