Low-wage Jobs: A Means for Employment Integration of the Unemployed? Evidence from Administrative Data in Germany and Austria
Does the low wage sector serve as a stepping stone towards integration into better-paid jobs or at least towards integration of jobless people into employment? There is evidence for a "low-wage trap" and for a high risk of low-wage earners to get unemployed, but this may also be due to sorting effects and not to low-wage work itself. The present paper contributes to this debate analysing employment spells of male low-wage earners who had been unemployed before, with methods of continuous-time event history analysis. The present data have been retrieved from two large administrative micro-data sources: the IAB employment sample (IABS) for Germany, and a combination of social security data from the Austrian Social Insurance Institutions. Two possible exits of low-wage spells are focused on: exits to higher-paid employment (upward mobility vs. persistence), and exits to unemployment ("no pay-low pay cycle"). The results show shorter spell durations in Austria, pointing to a considerably higher fluctuation and labour turnover in the Austrian labour market. The influence of individual and firm-related characteristics and of the individual unemployment history on exit probabilities and the role of duration dependence in both countries is investigated. With regard to upward mobility, no convincing evidence for "true" duration dependence is found, at least for Germany. As to the risk of falling back into unemployment, the results suggest that even low-wage workers can accumulate job-related human capital favouring employment integration over time.
|Date of creation:||22 Dec 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Arsenal Object 20, A-1030 Wien|
Phone: (+43 1) 798 26 01-0
Fax: (+43 1) 798 93 86
Web page: http://www.wifo.ac.at/
More information through EDIRC
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, 2008. "Estimating low pay transition probabilities accounting for endogenous selection mechanisms," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 57(2), pages 165-186.
- Lorenzo Cappellari & Stephen P. Jenkins, 2004.
"Modelling low income transitions,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 19(5), pages 593-610.
- Cappellari, Lorenzo & Jenkins, Stephen P., 2002. "Modelling Low Income Transitions," IZA Discussion Papers 504, Institute for the Study of Labor (IZA).
- Lorenzo Cappellari & Stephen P. Jenkins, 2002. "Modelling Low Income Transitions," Discussion Papers of DIW Berlin 288, DIW Berlin, German Institute for Economic Research.
- Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
- Heckman, James J, 1991. "Identifying the Hand of the Past: Distinguishing State Dependence from Heterogeneity," American Economic Review, American Economic Association, vol. 81(2), pages 75-79, May.
- Lorenzo Cappellari, 1999. "Low-Wage Mobility in the Italian Labour Market," The Warwick Economics Research Paper Series (TWERPS) 531, University of Warwick, Department of Economics.
- 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.
- Boockmann, Bernhard & Steffes, Susanne, 2005. "Individual and Plant-level Determinants of Job Durations in Germany," ZEW Discussion Papers 05-89, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
When requesting a correction, please mention this item's handle: RePEc:wfo:wpaper:y:2010:i:383. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilse Schulz)
If references are entirely missing, you can add them using this form.