Low-wage employment versus unemployment: Which one provides better prospects for women?

Abstract

This study analyzes state dependence in low-wage employment of western German women using GSOEP data, 2000-2006. We estimate dynamic multinomial logit models with random effects and find that having a low-wage job increases the probability of being low-paid and decreases the chances of being high-paid in the future, in particular for low-paid women working part-time. However, concerning future wage prospects low-paid women are clearly better off than unemployed or inactive women. We argue that for women low-wage jobs can serve as stepping stones out of unemployment and are to be preferred to staying unemployed and waiting for a better job.

Cite article

Mosthaf, A., Schank, T. & Schnabel, C. (2009): Low-wage employment versus unemployment: Which one provides better prospects for women? (Universität Erlangen, Nürnberg, Lehrstuhl für Arbeitsmarkt- und Regionalpolitik. Diskussionspapiere 65), Erlangen, 28 p.