Alexander Plum

Low‐Wage Jobs — Springboard to High‐Paid Ones?

We examine whether low-paid jobs have an effect on the probability that unemployed persons obtain better-paid jobs in the future (springboard effect). We make use of data from the German Socio-Economic Panel (SOEP) and apply a dynamic random-effects probit model. Our results suggest that low-wage jobs can act as springboards to better-paid work. The improvement of the chance to obtain a high-wage job by accepting low-paid work is particularly large for less-skilled persons and for individuals with longer periods of unemployment. Low-paid work is less beneficial if the job is associated with a low social status.

The British low-wage sector and the employment prospects of the unemployed

ABSTRACT Are low wages a way for the unemployed to switch to higher-paying jobs? Using data from the British Household Panel Survey, the labour market dynamics of unemployed, low-paid and higher-paid employed men are analysed. Moreover, the respective (un)employment duration and occupational skill level are accounted for. Results show that in general low wages significantly reduce the risk of future unemployment and increase the chances of ascending the salary ladder, especially in the case of long-term unemployment (>360 days). Furthermore, the occupational skill level has a substantial influence on the upward mobility of low-paid jobs: individuals working in the initial period in a low-paid and higher-skilled occupation have on average an 11 percentage points higher probability of entering higher pay compared to when working in a low-paid and low-skilled occupation.

Becoming unemployed and poor in Great Britain

ABSTRACT In this study on Great Britain, we estimate the labour market and income process of prime-aged men simultaneously and control for spillover effects. Evidence is presented that the risk of becoming unemployed and poor increases with the duration of unemployment and decreases with the duration of employment. Moreover, the experience of poverty influences the labour market and income prospects negatively, though on a much smaller scale than does the labour market position.