Low-Wage Careers: Are There Dead-End Firms and Dead-End Jobs?
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 administrational occupations. Consequently, leaving these dead-end plants and occupations appears to be an important instrument for achieving wages above the low-wage threshold.
|Date of creation:||Jan 2010|
|Publication status:||published in: Zeitschrift für ArbeitsmarktForschung /Journal for Labour Market Research, 2011, 43 (3), 231-249|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
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.:
- 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.
- Cappellari, Lorenzo & Jenkins, Stephen P., 2004. "Modelling low pay transition probabilities, accounting for panel attrition, non-response, and initial conditions," ISER Working Paper Series 2004-08, Institute for Social and Economic Research.
- 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.
- 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.
- Lorenzo Cappellari, 2007. "Earnings mobility among Italian low-paid workers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(2), pages 465-482, April.
- Cappellari, Lorenzo, 2001. "Earnings mobility among Italian low paid workers," ISER Working Paper Series 2001-13, Institute for Social and Economic Research.
- Cappellari, Lorenzo, 2004. "Earnings Mobility Among Italian Low Paid Workers," IZA Discussion Papers 1068, Institute for the Study of Labor (IZA).
- 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.
- 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).
- 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.
- Schank Thorsten & Schnabel Claus & Stephani Jens, 2009. "Geringverdiener: Wem und wie gelingt der Aufstieg? / Low-Wage Earners: Who Manages to Reach Higher Wage Levels?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(5), pages 584-614, October.
- 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.
- Sven Jung & Claus Schnabel, 2011. "Paying More than Necessary? The Wage Cushion in Germany," LABOUR, CEIS, vol. 25(2), pages 182-197, 06.
- Jung, Sven & Schnabel, Claus, 2009. "Paying More than Necessary? The Wage Cushion in Germany," IZA Discussion Papers 4278, Institute for the Study of Labor (IZA).
- Jung, Sven & Schnabel, Claus, 2009. "Paying more than necessary? The wage cushion in Germany," Discussion Papers 63, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
- 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.
- 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]. Full references (including those not matched with items on IDEAS)