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Tracking the Work Histories of Low-Wage Workers

By Roger Kirk Reese


It is critical that policy makers and researchers have an idea of what future earnings look like for a typical low-wage worker, and how this picture differs for individuals of various socio-demographic characteristics. In light of the growing income gap, scholars have done well to measure growth in overall income mobility. These measures have been improved by lifetime, longitudinal data from IRS tax records, but these administrative data offer little demographic detail. The panel data that do offer such demographics, lack in length coverage or sample density. We find either short temporal coverage of study, or what could be characterized as a time-series of cross-sections, drawing conclusions from one individual’s earlier career and another’s later career. Furthermore, the relative and overall mobility approach that has been the focus of existing literature, tells us nearly nothing about the absolute experience of low-wage individuals hoping to climb the ladder to prosperity. Also, little has been done to de-aggregate average earnings across specific sub-sets of the low-wage population. The Survey of Income and Program Participation panel offers a balance in the trade-off between years of coverage and demographic information. The SIPP Synthetic Beta preserves many detailed variables of the SIPP, while linking observations to lifetime administrative data from the IRS and Social Security Administration. These detailed demographics allow the separation of typical low wage workers from high-wage/high-skill workers temporarily receiving low wage. I use the SSB to map out how low-wage workers, conditioned as being so by their wage rate and work consistency, can expect their absolute earnings to progress throughout the remainder of their career. This paper does not attempt to propagate a particular point, but rather to take an explorative approach to usefully organizing and making available insight into long-term earnings trajectories for different types of low-wage earners

Topics: Income Mobility, Inequality, Income Distribution, Labor Economics, Micro Economics, Economics, SIPP Synthetic Beta, Survey of Income and Program Participation.
Year: 2017
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Provided by: Texas A&M University

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