Earnings prospects for low-paid workers higher than for the unemployed but only in high-pay areas with high unemployment

Konferenzbeitrag

There is considerable debate on whether the prospects of entering a high-paid job are better for those in low-paid jobs compared to the unemployed. Whilst some scholars argue that there is a scarring effect of unemployment others highlight that low pay might signal a low productivity and furthermore reduce the time searching for a better paid job. Using longitudinal data for working age men in England matched with local labor market indicators, we estimate several random-effects probit models and find no difference in the probability of becoming high-paid employed between low-paid workers and the unemployed in areas with low unemployment. However, in areas with high unemployment and high pay, low-paid workers have a higher probability of entering high-paid employment than the unemployed. Moreover, there is a penalty for low-wage workers compared to the unemployed in low-pay areas in their probability of entering high-paid employment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Labor 2 ; No. B17-V2

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Job, Occupational, and Intergenerational Mobility; Promotion ; Wage Level and Structure; Wage Differentials

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Plum, Alexander ; Knies, Gundi
• Event: Veröffentlichung
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/112845
• Last update: 10.03.2025, 11:42 AM CET