The Low-Pay No-Pay Cycle: Are There Systematic Differences across Demographic Groups?

King Fok, Rosanna Scutella and Roger Wilkins ()

Oxford Bulletin of Economics and Statistics, 2015, vol. 77, issue 6, 872-896

Abstract: type="main" xml:id="obes12084-abs-0001">

We investigate transitions between unemployment, low-paid employment and higher-paid employment using dynamic panel data methods applied to household panel data. We find state dependence in both unemployment and low-paid employment and evidence of a low-pay no-pay cycle. However, we also find significant differences in effects across population subgroups. Typically, the young and better-educated face lower penalties from unemployment and low-paid employment. Further, low-paid employment is preferable to unemployment for women regardless of their demographic characteristics, but for men who have only completed secondary schooling, low-paid employment actually decreases the chances of entering higher-paid employment by more than does unemployment.

Date: 2015
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Working Paper: The Low-Pay No-Pay Cycle: Are There Systematic Differences across Demographic Groups? (2013)
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