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Escaping the low pay trap: do labour market entrants stand a chance?

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  • Pavlopoulos, Dimitris
  • Fouarge, Didier

Abstract

This paper investigates the wage and employment perspectives of low-wage labour market entrants, using panel data from the UK, the Netherlands, and Germany. We apply a competing risks hazard model of transitions from low pay to higher pay, to unemployment or to inactivity. Low pay is found to be a rather transitory experience. However, a significant amount of transitions between low pay and non-employment is indicated. Exits from low-pay seem to be determined by firm-specific skills in the UK and the Netherlands, while by formal educational and vocational training qualifications in Germany.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 226.

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Date of creation: Apr 2006
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Handle: RePEc:pra:mprapa:226

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Keywords: low pay; competing risks; panel data;

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  1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  2. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
  3. Cappellari, Lorenzo & Jenkins, Stephen P., 2002. "Modelling Low Income Transitions," IZA Discussion Papers 504, Institute for the Study of Labor (IZA).
  4. Grip,Andries,de & Wolbers,Maarten H.J., 2003. "Do Low-Skilled Youngsters get Better Jobs in Countries where Internal Labour Markets Dominate?," ROA Research Memorandum 008, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  5. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, May.
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Cited by:
  1. Adriana Fontes Rocha Expósito Da Silva & Valéria Lúcia Pero, 2011. "Low-Paid Employment In Brazil," Anais do XXXVIII Encontro Nacional de Economia [Proceedings of the 38th Brazilian Economics Meeting] 140, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

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