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Journal Article

The British low-wage sector and the employment prospects of the unemployed


Publication date



Are low wages a way for the unemployed to switch to higher-paying jobs? Using data from the British Household Panel Survey, the labour market dynamics of unemployed, low-paid and higher-paid employed men are analysed. Moreover, the respective (un)employment duration and occupational skill level are accounted for. Results show that in general low wages significantly reduce the risk of future unemployment and increase the chances of ascending the salary ladder, especially in the case of long-term unemployment (>360 days). Furthermore, the occupational skill level has a substantial influence on the upward mobility of low-paid jobs: individuals working in the initial period in a low-paid and higher-skilled occupation have on average an 11 percentage points higher probability of entering higher pay compared to when working in a low-paid and low-skilled occupation.

Published in

Applied Economics

Volume and page numbers

51 , 1411 -1432





Labour Market, Labour Economics, Unemployment, and Wages And Earnings


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Related publications

  1. The British low-wage sector and the employment prospects of the unemployed

    Alexander Plum

    1. Labour Market
    2. Labour Economics
    3. Unemployment
    4. Wages And Earnings


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