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Do the 'Working Poor' Stay Poor? An Analysis of Low Pay Transitions in Italy

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  • Cappellari, Lorenzo

Abstract

This paper uses survey panel data to look at transition probabilities at the bottom of the Italian earnings distribution. The econometric analysis is characterized by a proper treatment of the initial conditions problem and by the investigation of genuine state dependence, the extent with which low pay probabilities depend upon the past experience of low pay other things equal. Results indicate that initial conditions are endogenous and that genuine state dependence can be relevant in determining low pay persistence. On the other hand, individual attributes are found to affect on transition probabilities, although to a limited extent. Copyright 2002 by Blackwell Publishing Ltd

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  • Cappellari, Lorenzo, 2002. " Do the 'Working Poor' Stay Poor? An Analysis of Low Pay Transitions in Italy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(2), pages 87-110, May.
  • Handle: RePEc:bla:obuest:v:64:y:2002:i:2:p:87-110
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    References listed on IDEAS

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    1. Stewart, Mark B & Swaffield, Joanna K, 1999. "Low Pay Dynamics and Transition Probabilities," Economica, London School of Economics and Political Science, vol. 66(261), pages 23-42, February.
    2. O'Higgins, Niall, 1994. "YTS, Employment, and Sample Selection Bias," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 605-628, October.
    3. Sloane, P J & Theodossiou, I, 1996. "Earnings Mobility, Family Income and Low Pay," Economic Journal, Royal Economic Society, vol. 106(436), pages 657-666, May.
    4. Cappellari, Lorenzo, 2000. "The Covariance Structure of Italian Male Wages," Manchester School, University of Manchester, vol. 68(6), pages 659-684, December.
    5. Lorenzo Cappellari, 1999. "Low-pay transitions and attrition bias in Italy : An analysis using simulation based estimation," The Warwick Economics Research Paper Series (TWERPS) 532, University of Warwick, Department of Economics.
    6. Lorenzo Cappellari, 1999. "Low-Wage Mobility in the Italian Labour Market," The Warwick Economics Research Paper Series (TWERPS) 531, University of Warwick, Department of Economics.
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    Cited by:

    1. Hielke Buddelmeyer & Wang-Sheng Lee & Mark Wooden, 2010. "Low-Paid Employment and Unemployment Dynamics in Australia," The Economic Record, The Economic Society of Australia, vol. 86(272), pages 28-48, March.
    2. Dimitris Pavlopoulos & Ruud Muffels & Jeroen Vermunt, 2010. "Wage mobility in Europe. A comparative analysis using restricted multinomial logit regression," Quality & Quantity: International Journal of Methodology, Springer, vol. 44(1), pages 115-129, January.
    3. Schnitzlein, Daniel D. & Stephani, Jens, 2016. "Locus of Control and low-wage mobility," Journal of Economic Psychology, Elsevier, vol. 53(C), pages 164-177.
    4. Lorenzo Cappellari, 2007. "Earnings mobility among Italian low-paid workers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(2), pages 465-482, April.
    5. Mosthaf, Alexander & Schnabel, Claus & Stephani, Jens, 2009. "Low-wage careers: are there dead-end firms and dead-end jobs?," Discussion Papers 66, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    6. Lixin Cai, 2015. "The dynamics of low pay employment in Australia," International Journal of Manpower, Emerald Group Publishing, vol. 36(7), pages 1095-1123, October.
    7. Ken Clark & Nikolaos C. Kanellopoulos, 2009. "Low Pay Persistence in European Countries," SOEPpapers on Multidisciplinary Panel Data Research 207, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Anton Michálek & Zuzana Veselovská, 2015. "Poverty Risk in Districts of the Slovak Republic," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 124(1), pages 67-83, October.
    9. Schank, Thorsten & Schnabel, Claus & Stephani, Jens, 2008. "Geringverdiener: Wem und wie gelingt der Aufstieg?," IAB Discussion Paper 200814, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Arne Uhlendorff, 2006. "From No Pay to Low Pay and Back Again?: A Multi-State Model of Low Pay Dynamics," Discussion Papers of DIW Berlin 648, DIW Berlin, German Institute for Economic Research.
    11. Clark, Ken & Kanellopoulos, Nikolaos C., 2013. "Low pay persistence in Europe," Labour Economics, Elsevier, vol. 23(C), pages 122-134.
    12. Daniel D. Schnitzlein & Jens Stephani, 2013. "Locus of Control and Low-Wage Mobility," SOEPpapers on Multidisciplinary Panel Data Research 589, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Maite Blázquez Cuesta & Wiemer Salverda, 2009. "Low-wage Employment and the Role of Education and On-the-job Training," LABOUR, CEIS, vol. 23(s1), pages 5-35, March.
    14. Andrea Brandolini & Piero Casadio & Piero Cipollone & Marco Magnani & Alfonso Rosolia, 2007. "Employment Growth in Italy in the 1990s: Institutional Arrangements and Market Forces," AIEL Series in Labour Economics,in: Nicola Acocella & Riccardo Leoni (ed.), Social Pacts, Employment and Growth. A Reappraisal of Ezio Tarantelli’s Thought, edition 1, chapter 4, pages 31-68 AIEL - Associazione Italiana Economisti del Lavoro.
    15. Lixin Cai, 2014. "State-Dependence and Stepping-Stone Effects of Low-Pay Employment in Australia," The Economic Record, The Economic Society of Australia, vol. 90(291), pages 486-506, December.
    16. 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].
    17. Lorenzo Cappellari, 2004. "The Dynamics and Inequality of Italian Men’s Earnings: Long-term Changes or Transitory Fluctuations?," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    18. Aretz, Bodo & Gürtzgen, Nicole, 2012. "What explains the decline in wage mobility in the German low-wage sector?," ZEW Discussion Papers 12-041, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    19. Bolvig, Iben, 2004. "Within- and between-firm mobility in the low-wage labour market," Working Papers 04-11, University of Aarhus, Aarhus School of Business, Department of Economics.
    20. Cai, Lixin & Mavromaras, Kostas G. & Sloane, Peter J., 2016. "Low Paid Employment in Britain: Estimating State-Dependence and Stepping Stone Effects," IZA Discussion Papers 9633, Institute for the Study of Labor (IZA).
    21. Aretz, Bodo & Gürtzgen, Nicole, 2012. "The Evolution of Wage Mobility in the German Low-Wage Sector - Is There Evidence for Increasing State Dependence?," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62049, Verein für Socialpolitik / German Economic Association.
    22. 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].
    23. Lokshin, Michael & Glinskaya, Elena, 2008. "The effect of male migration for work on employment patterns of females in nepal," Policy Research Working Paper Series 4757, The World Bank.

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