Low-wage jobs: Stepping stone or poverty trap?

Andreas Knabe and Alexander Plum

No 2010/28, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: We examine whether low-paid jobs have an effect on the occupational advancement probability of unemployed persons to obtain better-paid jobs in the future (stepping-stone 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 acts stepping stones 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 unemployment experiences. Low-paid work is less beneficial if the job is also associated with a low social status.

Keywords: low pay dynamics; unemployment dynamics; dynamic random effects models; state dependence (search for similar items in EconPapers)
JEL-codes: J31 J62 J64 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-lab
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Low-Wage Jobs - Stepping Stone or Poverty Trap? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:201028

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