IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/127628.html

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
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/127628/1/MPRA_paper_127628.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jan Ours, 2009. "Will You Still Need Me: When I’m 64?," De Economist, Springer, vol. 157(4), pages 441-460, December.
    2. Lorenzo Cappellari & Richard Dorsett & Getinet Haile, 2010. "State dependence and unobserved heterogeneity in the employment transitions of the over-50s," Empirical Economics, Springer, vol. 38(3), pages 523-554, June.
    3. Alfonso Rosolia & Roberto Torrini, 2007. "The generation gap: relative earnings of young and old workers in Italy," Temi di discussione (Economic working papers) 639, Bank of Italy, Economic Research and International Relations Area.
    4. 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.
    5. Paolo Naticchioni & Michele Raitano & Claudia Vittori, 2016. "La Meglio Gioventù: earnings gaps across generations and skills in Italy," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(2), pages 233-264, August.
    6. Ambra Poggi, 2007. "Does persistence of social exclusion exist in Spain?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 53-72, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesca Subioli & Michele Raitano, 2025. "When mobility matters: a look at earnings dynamics across Italian generations," Economica, London School of Economics and Political Science, vol. 92(368), pages 1168-1210, October.
    2. Marjan Maes, 2013. "Poverty persistence among the elderly in the transition from work to retirement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 35-56, March.
    3. Francesca Subioli & Michele Raitano, 2022. "Differences set in stone: evidence on the inequality-mobility trade off in italy," Working Papers 633, ECINEQ, Society for the Study of Economic Inequality.
    4. REINSTADLER Anne & RAY Jean-Claude, 2010. "Macro Determinants of Individual Income Poverty in 93 Regions of Europe," LISER Working Paper Series 2010-13, Luxembourg Institute of Socio-Economic Research (LISER).
    5. Alessio Tomelleri, 2021. "Temporary jobs and increasing inequality for recent cohorts in Italy," LABOUR, CEIS, vol. 35(4), pages 500-537, December.
    6. Maite Blázquez & Santiago Budr�a, 2012. "Overeducation dynamics and personality," Education Economics, Taylor & Francis Journals, vol. 20(3), pages 260-283, March.
    7. Francesca Modena & Concetta Rondinelli, 2011. "Leaving home and housing prices. The experience of Italian youth emancipation," Department of Economics Working Papers 1101, Department of Economics, University of Trento, Italia.
    8. Börsch-Supan, Axel & Weiss, Matthias, 2016. "Productivity and age: Evidence from work teams at the assembly line," The Journal of the Economics of Ageing, Elsevier, vol. 7(C), pages 30-42.
    9. Ambra Poggi & Xavier Ramos, 2007. "Empirical Modeling of Deprivation Contagion Among Social Exclusion Dimensions (Using MCMC Methods)," LABORatorio R. Revelli Working Papers Series 59, LABORatorio R. Revelli, Centre for Employment Studies.
    10. Anna M. Falzoni & Alessandra Venturini & Claudia Villosio, 2007. "Skilled and Unskilled Wage Dynamics in Italy in the ‘90s: Changes in the individual characteristics, institutions, trade and technology," LABORatorio R. Revelli Working Papers Series 61, LABORatorio R. Revelli, Centre for Employment Studies.
    11. Gabriele Ballarino & Michela Braga & Massimiliano Bratti & Daniele Checchi & Antonio Filippin & Carlo V. Fiorio & Marco Leonardi & Elena Meschi & Francesco Scervini, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Italy," GINI Country Reports italy, AIAS, Amsterdam Institute for Advanced Labour Studies.
    12. Thomas Zwick & Katharina Frosch, 2017. "Attenuation bias when measuring inventive performance," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(3), pages 195-201, April.
    13. Tomasz Panek & Jan Zwierzchowski, 2022. "Examining the Degree of Social Exclusion Risk of the Population Aged 50 + in the EU Countries Under the Capability Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(3), pages 973-1002, October.
    14. Nicole Bosch & Bas ter Weel, 2013. "Labour-market outcomes of older workers in the Netherlands: Measuring job prospects using the occupational age structure," CPB Discussion Paper 234.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Bruno, Bosco & Ambra, Poggi, 2016. "Government effectiveness, middle class and poverty in the EU: A dynamic multilevel analysis," Working Papers 344, University of Milano-Bicocca, Department of Economics, revised 27 Jun 2016.
    16. Domenico Depalo & Salvatore Lattanzio, 2023. "The increase in earnings inequality and volatility in Italy: the role and persistence of atypical contracts," Questioni di Economia e Finanza (Occasional Papers) 801, Bank of Italy, Economic Research and International Relations Area.
    17. Giulia Bettin & Claudia Pigini & Alberto Zazzaro, 2023. "Lifting You up or Dragging You Down? The Role of Financial Inclusion in Poverty Transitions Among Italian Households," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 606-639, September.
    18. Paul Redmond & Seamus McGuinness & Elish Kelly, 2026. "Labour market dynamics of minimum wage workers," Applied Economics, Taylor & Francis Journals, vol. 58(10), pages 1985-1997, February.
    19. Stephan Kampelmann & François Rycx, 2012. "Are Occupations Paid What They are Worth? An Econometric Study of Occupational Wage Inequality and Productivity," De Economist, Springer, vol. 160(3), pages 257-287, September.
    20. Keith A. Bender & John S. Heywood, 2017. "Educational mismatch and retirement," Education Economics, Taylor & Francis Journals, vol. 25(4), pages 347-365, July.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:127628. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.