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IZA Discussion Paper No. 12896
January 2020
Not Much Bounce in the Springboard: On the Mobility of Low Pay Workers

Estimating economic earnings mobility is imperative for understanding the degree to which low pay employment is a temporary or long-term position. The current literature estimates transition probabilities between low and higher pay. This study extends the focus to identify the underlying pecuniary wage change via construction of an intermediate pay zone marginally above low pay. Utilising monthly administrative data we find that individuals with a strong attachment to the low pay sector have a very low probability of shifting into higher pay. Further, these individuals also have a substantially greater risk of experiencing a low pay-no pay cycle relative to those who are intermediate or higher paid. Notably, this finding is only uncovered using within year variation in wages to reveal intensity of labour market attachment.

Communications
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Network Coordination
Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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