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

Purpose { This paper investigates the extent and the human-capital de- terminants of low-wage mobility for labour market entrants, in the UK and Germany. Design/methodology/approach { Using panel data for the UK (BHPS) and Germany (GSOEP), we apply a competing-risks duration model that al- lows us to study transitions from low pay to competing destination states: higher pay, self-employment, unemployment and inactivity. Unobserved het- erogeneity is tackled by a non-parametric mass-point approach. Findings { We ¯nd that low pay is only a temporary state for most young job starters. However, there is a small group of job starters that is caught in a trap of low pay, unemployment or inactivity. In the UK, job starters escape from low pay mainly by developing ¯rm-speci¯c skills. In Germany, involvement in formal vocational training and the attainment of apprenticeship quali¯cations account for low pay exits. Originality/value { Over the past decades, unemployment and low-wage employment have emerged as major challenges facing young labour market entrants. While most empirical studies focus exclusively on the transition from low pay to high pay, we show that a signi¯cant percentage of young entrants are caught in a low-pay - non-employment trap. Moreover, we show that, depending on the institutional context, di®erent types of human capital investments can account for a successful low-pay exit.Low pay ; labour market entry ; duration model ; human capital

Income mobility and deprivation dynamics among the elderly in Belgium and the Netherlands

This paper analyzes the dynamics of income and deprivation among the elderly in Belgium and the Netherlands between 1985 and 1988. It appears that, in 1985, the average level of deprivation in Belgium and the Netherlands was about the same. However, Belgium saw an increase between 1985 and 1988, while deprivation remained at a stable level in the Netherlands. In both countries, the difference in deprivation between the non-elderly and the elderly increased. However, while the elderly in the Netherlands were worse off than the non-elderly in 1988, the opposite situation was found in Belgium. At the level of individuals, the analysis of deprivation dynamics indicated that the majority of the elderly as well as the non-elderly population experienced substantial changes in deprivation status. Overall, living conditions turned out to be more stable in the Netherlands than in Belgium and, among the Dutch, more stable among the elderly than among the non-elderly. The income position of the elderly appeared to be comparable between the two countries. Regarding income mobility, income loss and, consequently, inflow into poverty were more likely among those retiring early than among those not retiring early. However, from an analysis of the relationship between income mobility and deprivation dynamics, it appeared that the living conditions of the elderly were not directly affected by changes in income. One explanation for this result may be ability to draw on savings to avoid deprivation, at least for some time.incomes;incomes policy;early retirement

The Effect of Early Retirement Incentives on the Training Participation of Older Workers.

Human capital theory predicts that older workers are less likely to participate in on-the-job training than younger workers, due to lower net returns on such investments. Early retirement institutions are likely to affect these returns. Using the European Community Household Panel we show that older workers participate less in training, and that early retirement institutions do indeed matter. Generous early retirement schemes discourage older workers from taking part in training, whereas flexible early retirement schemes encourage this. Finally, the results suggest that in most European countries training can keep older workers longer in the labour market.

Working Profiles and Employment Regimes in European Panel Perspective

Using longitudinal information on labour market participation we analyse the dynamics of unemployment in Europe. We focus in particular on individuals with a poor attachment to the labour market. The countries under scrutiny are clustered into four ideal-typical welfare regimes. Overall, a remarkable stability with respect to permanent employment is observed. But on the other end, there also is a substantial mobility between secure en insecure jobs. Nevertheless, mobility from insecure employment to secure employment is found to be larger in liberal and social-democratic countries than in Southern Europe.Labour Market; social exclusion; labour market mobility; labour market dynamics; insecure employment; European Community Household Panel

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

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.low pay; competing risks; panel data