Low pay dynamics and transition probabilities
Low pay dynamics and transition probabilities
This paper models low pay transitions in Britain using a bivariate probit model with endogenous selection to address the ‘initial conditions’problem and parental variables as instruments. The exogeneity of the initial state is strongly rejected and results in considerable overstatement of theeffects of explanatory factors. The probability of being low paid dependsstrongly on low pay in the previous year. Restricting attention to those who remain employees results in an overstatement of the probability of the low paid moving up the earnings distribution, but is not found to have much effect on the estimated effects of explanatory variables.
23-42
Swaffield, Jo
9e0d6fe1-3219-4d1c-8cff-52c7fac1568f
Stewart, Mark
94835629-75dd-4de4-96c5-23ff1634bc42
1999
Swaffield, Jo
9e0d6fe1-3219-4d1c-8cff-52c7fac1568f
Stewart, Mark
94835629-75dd-4de4-96c5-23ff1634bc42
Swaffield, Jo and Stewart, Mark
(1999)
Low pay dynamics and transition probabilities.
Economica, 66 (261), .
(doi:10.1111/1468-0335.00154).
Abstract
This paper models low pay transitions in Britain using a bivariate probit model with endogenous selection to address the ‘initial conditions’problem and parental variables as instruments. The exogeneity of the initial state is strongly rejected and results in considerable overstatement of theeffects of explanatory factors. The probability of being low paid dependsstrongly on low pay in the previous year. Restricting attention to those who remain employees results in an overstatement of the probability of the low paid moving up the earnings distribution, but is not found to have much effect on the estimated effects of explanatory variables.
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1468-0335.00154
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Published date: 1999
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Local EPrints ID: 453677
URI: http://eprints.soton.ac.uk/id/eprint/453677
ISSN: 0013-0427
PURE UUID: 0f1c38d2-f084-498f-adc4-029a0265f994
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Date deposited: 20 Jan 2022 17:45
Last modified: 17 Mar 2024 04:09
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Mark Stewart
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