Low-wage employment in Portugal: a mixed logit approach
AbstractIn this paper, we examine the determinants of low-wage employment in Portugal. For this purpose, we use a data file of the European Community Household Panel (ECHP) for the years 1998 and 1999. In order to take into account unobserved heterogeneity in the data, a random-parameter logit model is used to analyse the probability of a worker receiving a low wage. The results indicate that the consideration that the effects of the explanatory variables are the same across all individuals, such as is assumed in most of the literature may be misleading. From the policy perspective, this implies that the use of a single instrument in order to combat low-wage employment is inappropriate to satisfy the whole population. In view of this, policies tailored by clusters would be more appropriate.
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Bibliographic InfoPaper provided by EconWPA in its series Labor and Demography with number 0508001.
Length: 22 pages
Date of creation: 05 Aug 2005
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low-wage employment; random-parameter logit model; public policy.;
Other versions of this item:
- Barros, Carlos Pestana & Proença, Isabel & Vieira, José A. Cabral, 2005. "Low-Wage Employment in Portugal: A Mixed Logit Approach," IZA Discussion Papers 1667, Institute for the Study of Labor (IZA).
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-08-13 (All new papers)
- NEP-DCM-2005-08-13 (Discrete Choice Models)
- NEP-LAB-2005-08-13 (Labour Economics)
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