Munich Personal RePEc Archive

Escaping the low pay trap: do labour market entrants stand a chance?

Pavlopoulos, Dimitris and Fouarge, Didier (2006): Escaping the low pay trap: do labour market entrants stand a chance? Published in: OSA WP2006-25

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Abstract

This paper investigates the wage and employment perspectives of low-wage labour market entrants, using panel data from the UK, the Netherlands, and Germany. We apply a competing risks hazard model of transitions from low pay to higher pay, to unemployment or to inactivity. Low pay is found to be a rather transitory experience. However, a significant amount of transitions between low pay and non-employment is indicated. Exits from low-pay seem to be determined by firm-specific skills in the UK and the Netherlands, while by formal educational and vocational training qualifications in Germany.

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