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Low pay persistence in Europe

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  • Clark, Ken
  • Kanellopoulos, Nikolaos C.

Abstract

Using panel data for twelve European countries over the period 1994–2001 we estimate the extent of state dependence in low pay for male workers. Controlling for observable and unobservable heterogeneity as well as the endogeneity of initial conditions we find positive, statistically significant state dependence in every single country. The magnitude of this effect varies by country, however this variation is not systematically related to labour market institutions.

Suggested Citation

  • Clark, Ken & Kanellopoulos, Nikolaos C., 2013. "Low pay persistence in Europe," Labour Economics, Elsevier, vol. 23(C), pages 122-134.
    • Handle: RePEc:eee:labeco:v:23:y:2013:i:c:p:122-134
    DOI: 10.1016/j.labeco.2013.04.014
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    More about this item

    Keywords

    Low pay; Low pay persistence; State dependence; Initial conditions; Dynamic random effects probit models;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J69 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Other

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