Autori
Cappellari, Lorenzo
Jenkins, Sephen P.

Titolo
Transitions between unemployment and low pay
Periodico
Università degli Studi del Piemonte Orientale 'A. Avogadro' : Facoltà di Economia - Dipartimento di Scienze Economiche e Metodi Quantitativi "SEMEQ" - Quaderni
Anno: 2003 - Volume: 03 - Fascicolo: 58 - Pagina iniziale: 1 - Pagina finale: 22

There is great in Britain in the extent to wich there exist a 'low pay/no pay cycle'. That is, to what extent are individuals who are currently low paid more likely to become unemployed than high paid individuals, and are currently unemployed more likely to become low paid rather then high paid they get a job? To address these and related questions, we model annual transitions between unemployment, low-paid employment and high-paid employment. We use a first order Markov model that also takes into account the endogeneity of initial conditions, selection into employment, and sample attrition. The application is based on data for men from the British Household Panel Survey covering survey years 1991-2000. Our results show that all three selectivity issues should be addressed when analysing mens's labour market transitions. We find that low-paid men are more likely to become unemployed then high-paid men, and unemployed men have a greater chance of becoming low paid than do high-paid men. Transition from unemployment to low pay are associated with having relatively few educational qualifications. There is also evidence that the experienceof low pay or unemployment itself increases the chence of being trapped in those states (separately from the effects of indidual heterogeneity).




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