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The Inter-related Dynamics of Unemployment and Low-Wage Employment

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  • Stewart, Mark

    (University of Warwick)

Abstract

This paper examines the extent of state dependence in unemployment and the role played in this by intervening low-wage employment. A range of dynamic random and fixed effects estimators are compared. Low-wage employment is found to have almost as large an adverse effect as unemployment on future prospects and the difference in their effects is found to be insignificant. Evidence is presented that low-wage jobs act as the main conduit for repeat unemployment and considerably increases its probability. Obtaining a higher-wage job reduces the increased risk of repeat unemployment to insignificance.

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Bibliographic Info

Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 741.

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Length: 31 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:wrk:warwec:741

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Keywords: Unemployment dynamics ; low-wage employment ; State dependence ; unobserved heterogeneity ; dynamic random effects models ; repeat unemployment;

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References

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  1. Recession & social mobility
    by chris dillow in Stumbling and Mumbling on 2008-11-04 14:19:57
  2. In defence of tax credits
    by chris dillow in Stumbling and Mumbling on 2007-08-03 07:53:00
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