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The Anatomy of Low Pay Among Older Workers

Author

Listed:
  • Cappellari, Lorenzo
  • Giunta, Andrea Matteo

Abstract

This study uses administrative data on wages and employment to investigate the interaction between two pressing socio-economic challenges: population aging and the working poor. We examine the evolution of low pay across age and cohort. Results for low pay incidence show a U-shaped curve, indicating that close-to-retirement workers are among the most vulnerable in the labor force. Moreover, we find that while the probability of entering low pay is higher for young and older employees, older cohorts exhibit substantial low-pay state dependency, suggesting the presence of a poverty trap.

Suggested Citation

  • Cappellari, Lorenzo & Giunta, Andrea Matteo, 2025. "The Anatomy of Low Pay Among Older Workers," MPRA Paper 127628, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:127628
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    File URL: https://mpra.ub.uni-muenchen.de/127628/1/MPRA_paper_127628.pdf
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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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