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Earnings mobility among Italian low paid workers

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  • Cappellari, Lorenzo

Abstract

This paper uses Italian panel data to analyse transition probabilities at the bottom of the earnings distribution during the 1990s. The analytical framework is characterised by the ability to account for the endogeneity of initial conditions, educational attainment and earnings attrition, providing a model that encompasses those applied by previous research. Results show that the three selection mechanisms are endogenous for the estimation of low pay transitions. The data also reveal considerable state dependence, i.e. the experience of low pay is found to raise, per se, the probability of subsequent low pay episodes. Low pay persistence and entry rates are found to be larger among female employees, the low educated, manual workers in small firms and workers from the South relative to otherwise comparable individuals.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cappellari, Lorenzo, 2001. "Earnings mobility among Italian low paid workers," ISER Working Paper Series 2001-13, Institute for Social and Economic Research.
  • Handle: RePEc:ese:iserwp:2001-13
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    File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/iser/2001-13.pdf
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    References listed on IDEAS

    as
    1. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
    2. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling low income transitions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(5), pages 593-610.
    3. 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.
    4. Alesina, Alberto & La Ferrara, Eliana, 2005. "Preferences for redistribution in the land of opportunities," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 897-931, June.
    5. Moshe Buchinsky & Jennifer Hunt, 1999. "Wage Mobility In The United States," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 351-368, August.
    6. Hajivassiliou, Vassilis A. & Ruud, Paul A., 1986. "Classical estimation methods for LDV models using simulation," Handbook of Econometrics,in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 40, pages 2383-2441 Elsevier.
    7. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data.
    8. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
    9. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
    10. 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.
    11. Bourguignon, F. & Morrisson, C. & Atkinson, A.B., 1991. "Empirical Studies of Earnings Mobility," DELTA Working Papers 91-14, DELTA (Ecole normale supérieure).
    12. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(4), pages 529-567.
    13. Freeman, Richard B, 1996. "The Minimum Wage as a Redistributive Tool," Economic Journal, Royal Economic Society, vol. 106(436), pages 639-649, May.
    14. 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.
    15. James J. Heckman, 1981. "Heterogeneity and State Dependence," NBER Chapters,in: Studies in Labor Markets, pages 91-140 National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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