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

Alexander Mosthaf, Claus Schnabel and Jens Stephani

No 01/2010, FAU Discussion Papers in Economics from Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics

Abstract: 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.

Keywords: low-wage employment; wage mobility; Germany (search for similar items in EconPapers)
JEL-codes: J30 J60 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-bec and nep-lab
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Low-wage careers: Are there dead-end firms and dead-end jobs? (2011)
Working Paper: Low-Wage Careers: Are There Dead-End Firms and Dead-End Jobs? (2010)
Working Paper: Low-wage careers: are there dead-end firms and dead-end jobs? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwqwdp:012010

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