The Low‐Pay No‐Pay Cycle: Are There Systematic Differences across Demographic Groups? |
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| Authors: | Yin King Fok Rosanna Scutella Roger Wilkins |
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| Affiliation: | Melbourne Institute of Applied Economic and Social Research, Faculty of Business and Economics, The University of Melbourne, Melbourne, Vic., Australia |
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| Abstract: | We investigate transitions between unemployment, low‐paid employment and higher‐paid employment using dynamic panel data methods applied to household panel data. We find state dependence in both unemployment and low‐paid employment and evidence of a low‐pay no‐pay cycle. However, we also find significant differences in effects across population subgroups. Typically, the young and better‐educated face lower penalties from unemployment and low‐paid employment. Further, low‐paid employment is preferable to unemployment for women regardless of their demographic characteristics, but for men who have only completed secondary schooling, low‐paid employment actually decreases the chances of entering higher‐paid employment by more than does unemployment. |
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