Is it Easier to Escape from Low Pay in Urban Areas? Evidence from the UK

Centre for European Labour Market Paper No. 2004-05

University of Aberdeen Working Paper Series

Posted: 6 Sep 2004

See all articles by Euan Phimister

Euan Phimister

University of Aberdeen - Business School

Ioannis Theodossiou

University of Aberdeen - Business School

Richard Upward

University of Nottingham - School of Economics

Date Written: August 2004

Abstract

In this paper we compare periods of low pay employment between rural and urban areas in the UK. Using the British Household Panel Survey, we estimate the probability that a period of low pay employment will end allowing for a number of possible outcomes, namely to a 'high pay' job, self-employment, unemployment and out of the labour force. The results show that there are statistically significant differences in the dynamics of low pay across urban and rural labour markets, particularly in terms of exits to high pay and out of the labour force. After controlling for different personal and job characteristics across markets, rural low pay durations are slightly longer on average, with a lower probability that rural workers will move to high pay. However, the results suggest that the most significant urban-rural differences in the typical low pay experience are concentrated among certain types of individuals, e.g. young workers, women without qualifications.

Keywords: low pay, wages, duration, urban, rural, competing risk, hazard

JEL Classification: J31, R23

Suggested Citation

Phimister, Euan and Theodossiou, Ioannis and Upward, Richard, Is it Easier to Escape from Low Pay in Urban Areas? Evidence from the UK (August 2004). Centre for European Labour Market Paper No. 2004-05, University of Aberdeen Working Paper Series, Available at SSRN: https://ssrn.com/abstract=586022

Euan Phimister (Contact Author)

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom

HOME PAGE: http://www.abdn.ac.uk/~pec144/

Ioannis Theodossiou

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Richard Upward

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom
+44 115 951 5151 (Phone)
+44 115 951 4159 (Fax)

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