State-Dependence and Stepping Stone Effects of Low Pay Employment in Australia

Cai, Lixin (2013): State-Dependence and Stepping Stone Effects of Low Pay Employment in Australia.

Abstract

Using the HILDA Survey, this study examines state-dependence and stepping stone effects of low pay in Australia. The results show that both state-dependence and stepping stone effects of low pay are present after observed and unobserved individual heterogeneity is accounted for. The results also show that, other things being equal, people who are on low pay are more likely to be in employment in the future than those who are either unemployed or not in the labour force. On the other hand, people on low pay do not appear to be more likely to become jobless in the future than those on higher pay.

• Item Type: MPRA Paper
• Language: English
• Keywords: Low pay, stepping stone effects, state dependence, multinomial logit model
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C35 - Discrete Regression and Qualitative Choice Models ; Discrete Regressors ; Proportions; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J38 - Public Policy

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