Escaping low pay: do male labour market entrants stand a chance?
Purpose – The purpose of this paper is to investigate the extent and the human-capital determinants of low-wage mobility for labour market entrants in the UK and Germany. Design/methodology/approach – Using panel data for the UK (BHPS) and Germany (GSOEP), a competing-risks duration model is applied that allows the study of transitions from low pay to competing destination states: higher pay, self-employment, unemployment and inactivity. Unobserved heterogeneity is tackled by a non-parametric mass-point approach. Findings – It is found that low pay is only a temporary state for most young job starters. However, there is a small group of job starters that is caught in a trap of low pay, unemployment or inactivity. In the UK, job starters escape from low pay mainly by developing firm-specific skills. In Germany, involvement in formal vocational training and the attainment of apprenticeship qualifications account for low pay exits. Originality/value – Over the past decades, unemployment and low-wage employment have emerged as major challenges facing young labour market entrants. While most empirical studies focus exclusively on the transition from low pay to high pay, the paper shows that a significant percentage of young entrants are caught in a low-pay-non-employment trap. Moreover, it is shown that, depending on the institutional context, different types of human capital investments can account for a successful low-pay exit.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 31 (2010)
Issue (Month): 8 (November)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/ijm.htm Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rainer Winkelmann, 1996.
"Employment Prospects and Skill Acquisition of Apprenticeship-Trained Workers in Germany,"
Cornell University, ILR School, vol. 49(4), pages 658-672, July.
- Rainer Winkelmann, 1996. "Employment prospects and skill acquisition of apprenticeship-trained workers in Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(4), pages 658-672, July.
- Stewart, Mark B & Swaffield, Joanna K, 1999.
"Low Pay Dynamics and Transition Probabilities,"
London School of Economics and Political Science, vol. 66(261), pages 23-42, February.
- Stewart, M.B. & Swaffield, J.K., 1997. "Low Pay Dynamics and Transition Probabilities," The Warwick Economics Research Paper Series (TWERPS) 495, University of Warwick, Department of Economics.
- Henry S. Farber & Robert Gibbons, 1994.
"Learning and Wage Dynamics,"
707, Princeton University, Department of Economics, Industrial Relations Section..
- Clive Belfield & Xiangdong Wei, 2004. "Employer size-wage effects: evidence from matched employer-employee survey data in the UK," Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 185-193.
- 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.
- Chevalier, Arnaud & Harmon, Colm & Walker, Ian & Zhu, Yu, 2003.
"Does Education Raise Productivity or Just Reflect It?,"
CEPR Discussion Papers
3993, C.E.P.R. Discussion Papers.
- Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004. "Does Education Raise Productivity, or Just Reflect it?," Economic Journal, Royal Economic Society, vol. 114(499), pages F499-F517, November.
- Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2003. "Does education raise productivity, or just reflect it?," Working Papers 200304, School of Economics, University College Dublin.
- Lisa M. Powell, 2002. "Joint Labor Supply and Childcare Choice Decisions of Married Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 106-128.
- Eng Loh, 1994. "Employment probation as a sorting mechanism," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 471-486, April.
- Harhoff, Dietmar & Kane, Thomas J, 1996.
"Is the German Apprenticeship System a Panacea for the US Labour Market?,"
CEPR Discussion Papers
1311, C.E.P.R. Discussion Papers.
- Thomas J. Kane & Dietmar Harhoff, 1997. "Is the German apprenticeship system a panacea for the U.S. labor market?," Journal of Population Economics, Springer, vol. 10(2), pages 171-196.
- Harhoff, Dietmar & Kane, Thomas J., 1995. "Is the German apprenticeship system a panacea for the US labour market?," ZEW Discussion Papers 95-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Euan Phimister & Ioannis Theodossiou & Richard Upward, 2006. "Is it easier to escape from low pay in urban areas? Evidence from the United Kingdom," Environment and Planning A, Pion Ltd, London, vol. 38(4), pages 693-710, April.
- Cappellari, Lorenzo & Jenkins, Stephen P., 2002.
"Modelling Low Income Transitions,"
IZA Discussion Papers
504, Institute for the Study of Labor (IZA).
- Roy Thurik, 2003. "Entrepreneurship and Unemployment in the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 264-290, 08.
- 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.
- Uhlendorff, Arne, 2006. "From No Pay to Low Pay and Back Again? A Multi-State Model of Low Pay Dynamics," IZA Discussion Papers 2482, Institute for the Study of Labor (IZA).
- Thomas, Jonathan M, 1996. "An Empirical Model of Sectoral Movements by Unemployed Workers," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 126-53, January.
- Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
- Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
- Wolfgang Franz & Joachim Inkmann & Winfried Pohlmeier & Volker Zimmermann, 2000. "Young and Out in Germany (On Youths? Chances of Labor Market Entrance in Germany)," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 381-426 National Bureau of Economic Research, Inc.
- Brown, James N, 1989. "Why Do Wages Increase with Tenure? On-the-Job Training and Life-Cycle Wage Growth Observed within Firms," American Economic Review, American Economic Association, vol. 79(5), pages 971-91, December.
- Gagliarducci, Stefano, 2005. "The dynamics of repeated temporary jobs," Labour Economics, Elsevier, vol. 12(4), pages 429-448, August.
- repec:tpr:qjecon:v:87:y:1973:i:3:p:355-74 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:eme:ijmpps:v:31:y:2010:i:8:p:908-927. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If references are entirely missing, you can add them using this form.