The Low‐Pay No‐Pay Cycle: Are There Systematic Differences Across Demographic Groups?

25 Pages Posted: 27 Oct 2015

See all articles by Yin King Fok

Yin King Fok

University of Melbourne; University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Rosanna Scutella

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

R Wilkins

affiliation not provided to SSRN

Date Written: December 2015

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.

Suggested Citation

Fok, Yin King and Scutella, Rosanna and Wilkins, Roger, The Low‐Pay No‐Pay Cycle: Are There Systematic Differences Across Demographic Groups? (December 2015). Oxford Bulletin of Economics and Statistics, Vol. 77, Issue 6, pp. 872-896, 2015. Available at SSRN: https://ssrn.com/abstract=2680425 or http://dx.doi.org/10.1111/obes.12084

Yin King Fok (Contact Author)

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Rosanna Scutella

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia
+61 3 8344 8175 (Phone)
+61 3 8344 5630 (Fax)

HOME PAGE: http://wff1.ecom.unimelb.edu.au/iaesrwww/people/rscutella/

Roger Wilkins

affiliation not provided to SSRN

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