Low-Wage Jobs - Stepping Stone or Poverty Trap?
AbstractWe examine whether low-paid jobs have an effect on the occupational advancement probability of unemployed persons to obtain better-paid jobs in the future (stepping-stone effect). We make use of data from the German Socio-Economic Panel (SOEP) and apply a dynamic random-effects probit model. Our results suggest that low-wage jobs can act as stepping stones to better-paid work. The improvement of the chance to obtain a high-wage job by accepting low-paid work is particularly large for less-skilled persons and for individuals with longer unemployment experiences. Low-paid work is less beneficial if the job is also associated with a low social status.
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Bibliographic InfoPaper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 337.
Length: 27 p.
Date of creation: 2010
Date of revision:
low pay dynamics; unemployment dynamics; dynamic random effects models; state dependence;
Other versions of this item:
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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- Cai, Lixin, 2013. "State-Dependence and Stepping Stone Effects of Low Pay Employment in Australia," MPRA Paper 50522, University Library of Munich, Germany.
- Dutz, Mark A. & Kessides, Ioannis & O'Connell, Stephen & Willig, Robert D., 2011. "Competition and innovation-driven inclusive growth," Policy Research Working Paper Series 5852, The World Bank.
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