Low-wage careers: are there dead-end firms and dead-end jobs?

Arbeitspapier

Using representative linked employer-employee data of the German Federal Employment Agency, this paper shows that just one out of seven full-time employees who earned low wages (i.e. less than two-thirds of the median wage) in 1998/99 was able to earn wages above the low-wage threshold in 2003. Bivariate probit estimations with endogenous selection indicate that upward wage mobility is higher for younger and better qualified low-wage earners, whereas women are substantially less successful. We show that the characteristics of the employing firm also matter for low-wage earners’ probability of escaping low-paid work. In particular small plants and plants with a high share of low-wage earners often seem to be dead ends for low-wage earners. The likelihood of leaving the low-wage sector is also low when staying in unskilled and skilled service occupations and in unskilled commercial and administrational occupations. Consequently, leaving these dead-end plants and occupations appears to be an important instrument for achieving wages above the low-wage threshold.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IWQW Discussion Papers ; No. 01/2010

Classification and Topics

• Classification: Wirtschaft ; Wages, Compensation, and Labor Costs: General ; Mobility, Unemployment, Vacancies, and Immigrant Workers: General
• Subject: low-wage employment ; wage mobility ; Germany ; Niedriglohn ; Erwerbsverlauf ; Soziale Mobilität ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mosthaf, Alexander ; Schnabel, Claus ; Stephani, Jens
• Event: Veröffentlichung
• (who): Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW)
• (where): Nürnberg
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/29700
• Last update: 10.03.2025, 11:42 AM CET