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

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  • Cai, Lixin

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.

Suggested Citation

  • Cai, Lixin, 2013. "State-Dependence and Stepping Stone Effects of Low Pay Employment in Australia," MPRA Paper 50522, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:50522
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    References listed on IDEAS

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    Cited by:

    1. Claus Schnabel, 2021. "Low-wage employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 276-276, March.
    2. Kostas Mavromaras & Darcy Fitzpatrick, 2017. "Self-employment Dynamics in Australia and the Importance of State Dependence," The Economic Record, The Economic Society of Australia, vol. 93, pages 144-170, June.
    3. Jeff Borland & Michael Coelli, 2016. "Labour Market Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 92(299), pages 517-547, December.
    4. Pacheco, Gail & Plum, Alexander T. & Sloane, Peter J., 2020. "Not Much Bounce in the Springboard: On the Mobility of Low Pay Workers," IZA Discussion Papers 12896, Institute of Labor Economics (IZA).
    5. Pritadrajati, Dyah S. & Kusuma, Anggita C.M. & Saxena, Sweta C., 2021. "Scarred for life: Lasting consequences of unemployment and informal self-employment," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 206-219.

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    More about this item

    Keywords

    Low pay; stepping stone effects; state dependence; multinomial logit model;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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