Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions

39 Pages Posted: 6 Aug 2004

See all articles by Lorenzo Cappellari

Lorenzo Cappellari

Catholic University of the Sacred Heart of Milan; University of Essex - Institute for Social and Economic Research (ISER); Institute for the Study of Labor (IZA)

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration; Institute for the Study of Labor (IZA); University of Essex - Institute for Social and Economic Research (ISER)

Date Written: July 2004

Abstract

We model annual low pay transition probabilities taking account of three potentially endogenous selections: two sample drop-out mechanisms (panel attrition, non-employment) and 'initial conditions' (base-year low pay status). This model, and variants that ignore one or more of these selection mechanisms, are fitted to data for men from the British Household Panel Survey. Tests of the ignorability of the endogenous selection mechanisms suggest that 'economic' selection mechanisms, such as initial conditions and retention of employment, are more important than the 'survey' selection mechanism (attrition). However, consistent with related U.S. research, relatively simple models provide estimates of ovariate effects that differ little from the estimates from the complicated models.

Keywords: Transition probabilities, low pay, attrition, non-response, ignorability

JEL Classification: C33, J31, J64

Suggested Citation

Cappellari, Lorenzo and Jenkins, Stephen P., Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions (July 2004). Available at SSRN: https://ssrn.com/abstract=572782

Lorenzo Cappellari (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

University of Essex - Institute for Social and Economic Research (ISER)

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration ( email )

Houghton Street
London, England WC2A 2AE
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 120 687 3374 (Phone)
+44 120 687 3151 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
150
Abstract Views
975
rank
213,721
PlumX Metrics