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Low Pay Persistence in European Countries

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  • Ken Clark
  • Nikolaos C. Kanellopoulos

Abstract

Using panel data for twelve European countries over the period 1994-2001 we estimate the extent of state dependence in low pay. Controlling for observable and unobservable heterogeneity as well as the endogeneity of initial conditions we find positive, statistically significant state dependence in every single country. The magnitude of this effect varies by country, however this variation is not systematically related to labour market institutions.

Suggested Citation

  • 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).
  • Handle: RePEc:diw:diwsop:diw_sp207
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    References listed on IDEAS

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    4. 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.
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    Cited by:

    1. 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.
    2. 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.
    3. Kostas Mavromaras & Peter Sloane & Zhang Wei, 2015. "The scarring effects of unemployment, low pay and skills under-utilization in Australia compared," Applied Economics, Taylor & Francis Journals, vol. 47(23), pages 2413-2429, May.

    More about this item

    Keywords

    Low pay; low pay persistence; state dependence; initial conditions; dynamic random effects probit models;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

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