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When There is No Way Up: Reconsidering Low‐paid Jobs as Stepping‐stones
Author(s) -
Plum Alexander,
Pacheco Gail,
Dasgupta Kabir
Publication year - 2021
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12609
Subject(s) - earnings , stepping stone , demographic economics , economics , population , labour economics , current population survey , public economics , accounting , demography , unemployment , economic growth , sociology
The economic literature considers a low‐paid job as a ‘stepping‐stone’ if it improves jobless individuals’ future likelihood of transitioning towards higher pay. The majority of empirical studies rely on annual surveys and are unable to differentiate individuals by their degree of attachment to the low‐paid sector. Using population‐wide administrative data with monthly earnings information, our study first confirms the stepping‐stone effect. However, our analysis indicates that annual survey‐based evidence on the future likelihood of transitioning to higher‐paid jobs is likely overstated when respective groups of low‐paid workers and non‐employed individuals are identified by binary indicators.