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Low-Wage Employment versus Unemployment: Which One Provides Better Prospects for Women?

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  • Mosthaf, Alexander

    ()
    (Institute for Employment Research (IAB), Nuremberg)

  • Schank, Thorsten

    ()
    (University of Mainz)

  • Schnabel, Claus

    ()
    (University of Erlangen-Nuremberg)

Abstract

This study analyzes state dependence in low-wage employment of western German women using GSOEP data, 2000-2006. We estimate dynamic multinomial logit models with random effects and find that having a low-wage job increases the probability of being low-paid and decreases the chances of being high-paid in the future, in particular for low-paid women working part-time. However, concerning future wage prospects low-paid women are clearly better off than unemployed or inactive women. We argue that for women low-wage jobs can serve as stepping stones out of unemployment and are to be preferred to staying unemployed and waiting for a better job.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4611.

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Length: 28 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4611

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Keywords: low-pay dynamics; state dependence; dynamic multinomial logit model;

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References

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  1. Cappellari, Lorenzo, 2004. "Earnings Mobility Among Italian Low Paid Workers," IZA Discussion Papers 1068, Institute for the Study of Labor (IZA).
  2. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions," CESifo Working Paper Series 1232, CESifo Group Munich.
  3. Arulampalam, Wiji & Stewart, Mark B., 2008. "Simplified Implementation of the Heckman Estimator of the Dynamic Probit Model and a Comparison with Alternative Estimators," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 884, University of Warwick, Department of Economics.
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  6. Thorsten Schank & Claus Schnabel & Jens Stephani, 2009. "Geringverdiener: Wem und wie gelingt der Aufstieg?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 229(5), pages 584-614, October.
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  13. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
  14. Stephan, Gesine, 2009. "Employer wage subsidies and wages in Germany : some evidence from individual data," IAB Discussion Paper 200909, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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  20. Boris Hirsch & Thorsten Schank & Claus Schnabel, 2008. "Differences in Labor Supply to Monopsonistic Firms and the Gender Pay Gap: An Empirical Analysis Using Linked Employer-Employee Data from Germany," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 1111, Princeton University, Department of Economics, Industrial Relations Section..
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Citations

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Cited by:
  1. Mosthaf, Alexander, 2011. "Low-wage jobs - stepping stones or just bad signals?," IAB Discussion Paper 201111, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Hirsch, Boris & Schnabel, Claus, 2011. "Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009," Discussion Papers 73, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  3. Andreas Knabe & Alexander Plum, 2012. "Low-Wage Jobs – Springboard to High-Paid Ones?," CEIS Research Paper, Tor Vergata University, CEIS 246, Tor Vergata University, CEIS, revised 26 Jul 2012.
  4. Hirsch, Boris & Mueller, Steffen, 2014. "Firm leadership and the gender pay gap: do active owners discriminate more than hired managers?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 47(1-2), pages 129-142.
  5. Hirsch, Boris & Mueller, Steffen, 2010. "Temporary agency work and the user firm's productivity: First evidence from German Panel Data," Discussion Papers 68, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  6. Stephani, Jens, 2012. "Wage growth and career patterns of German low-wage workers," IAB Discussion Paper 201201, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  7. Stephani, Jens, 2013. "Does it matter where you work? : employer characteristics and the wage growth of low-wage workers and higher-wage workers," IAB Discussion Paper 201304, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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