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Can low-wage workers find better jobs?

Author

Listed:
  • Gabe, Todd M.

    (University of Maine)

  • Abel, Jaison R.

    (Federal Reserve Bank of New York)

  • Florida, Richard

    (University of Toronto)

Abstract

There is growing concern over rising economic inequality, the decline of the middle class, and a polarization of the U.S. workforce. This study examines the extent to which low-wage workers in the United States transition to better jobs, and explores the factors associated with such a move up the job ladder. Using data covering the expansion following the Great Recession (2011-17) and focusing on short-term labor market transitions, we find that around 70 percent of low-wage workers stayed in the same job, 11 percent exited the labor force, 7 percent became unemployed, and 6 percent switched to a different low-wage job. Troublingly, just slightly more than 5 percent of low-wage workers found a better job within a 12-month period. Study results point to the importance of educational attainment in helping low-wage workers move up the job ladder.

Suggested Citation

  • Gabe, Todd M. & Abel, Jaison R. & Florida, Richard, 2018. "Can low-wage workers find better jobs?," Staff Reports 846, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:846
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    References listed on IDEAS

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    1. repec:mth:raee88:v:10:y:2018:i:3:p:24-51 is not listed on IDEAS

    More about this item

    Keywords

    low-wage jobs; career ladder; labor market dynamics;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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