Low Pay Persistence in European Countries

34 Pages Posted: 26 May 2009

See all articles by Kenneth Clark

Kenneth Clark

University of Manchester - School of Social Sciences; IZA Institute of Labor Economics

Nikolaos Kanellopoulos

The Centre for Planning and Economic Research (KEPE)

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Abstract

Using panel data for twelve European countries over the period 1994-2001 we estimate the extent of state dependence in low pay. Controlling for observable and unobservable heterogeneity as well as the endogeneity of initial conditions we find positive, statistically significant state dependence in every single country. The magnitude of this effect varies by country, however this variation is not systematically related to labour market institutions.

Keywords: initial conditions, state dependence, low pay persistence, low pay, dynamic random effects probit models

JEL Classification: C23, C25, J31, J69

Suggested Citation

Clark, Ken and Kanellopoulos, Nikolaos, Low Pay Persistence in European Countries. IZA Discussion Paper No. 4183. Available at SSRN: https://ssrn.com/abstract=1409287

Ken Clark (Contact Author)

University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom
0161-275-3679 (Phone)

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

Nikolaos Kanellopoulos

The Centre for Planning and Economic Research (KEPE) ( email )

11, Amerikis str.
Athens, 106 72
Greece

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