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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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    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. 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.
    4. 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.
    5. 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)

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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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