Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130305
Authors: 
Cai, Lixin
Mavromaras, Kostas G.
Sloane, Peter J.
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers 9633
Abstract: 
Using 18 waves of the British Household Panel Study, this paper examines state dependence and stepping stone effects of low pay. A distinguishing feature is that five types of transition- not in the labour force (NILF), unemployment, self-employment, low pay and higher pay are modelled separately. The results show that both state dependence and stepping stone effects of low pay are present. However, there is no evidence to support a low-pay no-pay cycle. The introduction of the national minimum wage does not appear to have affected state-dependence and stepping stone effects of low pay.
Subjects: 
low pay
unemployment
state dependence
dynamic models
JEL: 
J24
J31
I21
Document Type: 
Working Paper

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