Low-Wage Jobs – Springboard to High-Paid Ones?

Andreas Knabe and Alexander Plum

No 246, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: 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.

Keywords: dynamic random effects models; low pay dynamics; state dependence; unemployment dynamics (search for similar items in EconPapers)
JEL-codes: J31 J62 J64 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012-07-26, Revised 2012-07-26
New Economics Papers: this item is included in nep-lab
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Journal Article: Low-wage Jobs — Springboard to High-paid Ones? (2013)
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