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Low-wage careers: Are there dead-end firms and dead-end jobs?

  • Mosthaf, Alexander

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Schnabel, Claus
  • Stephani, Jens

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

"Using representative linked employer-employee data of the German Federal Employment Agency, this paper shows that just one out of seven full-time employees who earned low wages (i.e., less than two-thirds of the median wage) in 1998/99 was able to earn wages above the low-wage threshold in 2003. Bivariate probit estimations with endogenous selection indicate that upward wage mobility is higher for younger and better qualified low-wage earners, whereas women are substantially less successful. We show that the characteristics of the employing firm also matter for low-wage earners' probability of escaping low-paid work. In particular, small plants and plants with a high share of low-wage earners often seem to be dead ends for low-wage earners. The likelihood of leaving the low-wage sector is also low when staying in unskilled and skilled service occupations and in unskilled commercial and administrative occupations. Consequently, leaving these dead-end plants and occupations appears to be an important instrument for achieving wages above the low-wage threshold." (Author's abstract, IAB-Doku) ((en))

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Article provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its journal Zeitschrift für ArbeitsmarktForschung – Journal for Labour Market Research.

Volume (Year): 43 (2011)
Issue (Month): 3 ()
Pages: 231-249

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Handle: RePEc:iab:iabzaf:v:2011:i:3:p:231-249
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  1. Bernd Görzig & Martin Gornig & Axel Werwatz, 2004. "Ostdeutschland: strukturelle Niedriglohnregion?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 71(44), pages 685-691.
  2. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  3. 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].
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  5. 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.
  6. Iris Koch & Holger Meinken, 2004. "The Employment Panel of the German Federal Employment Agency," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 124(2), pages 315-325.
  7. Cappellari, Lorenzo, 2004. "Earnings Mobility Among Italian Low Paid Workers," IZA Discussion Papers 1068, Institute for the Study of Labor (IZA).
  8. Sven Jung & Claus Schnabel, 2011. "Paying More than Necessary? The Wage Cushion in Germany," LABOUR, CEIS, vol. 25(2), pages 182-197, 06.
  9. 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.
  10. repec:ese:iserwp:2004-08 is not listed on IDEAS
  11. Achatz, Juliane & Gartner, Hermann & Glück, Timea, 2004. "Bonus oder Bias? Mechanismen geschlechtsspezifischer Entlohnung," IAB Discussion Paper 200402, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  12. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions," CESifo Working Paper Series 1232, CESifo Group Munich.
  13. 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.
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