Abstract

In Germany, around one in six people work in a low-wage job which is among the highest in Europe (Destatis, 2023) and roughly 60% who start in a low-wage work remain in low-wage work four years later. Although the share of employees in low-paid jobs has fallen by 5% since 2018, low-wage employment is still one of the most significant reasons why people end up in poverty. To counteract the problem of an increasingly impoverished social structure within a society, it is necessary to recognize and understand dynamics in and out of low-wage jobs. Analyzing the process of low-wage exit is crucial for evaluating the magnitude of the problem posed by low-wage employment and for designing successful policies that promote advancement. Thus, the key question of our research project is: Who is able to exit low-wage jobs and why? The overarching goal of this project is to better understand the role of skill development through job training programs as a mechanism through which occupations and firms affect exit from low-wage work. A central component of our research project is a detailed analysis of the influence of different types of job training on the probability of exiting a low-wage job. As primary workplaces, firms play a key role in the conceptualization of job training opportunities, which in turn have a significant impact on occupational mobility. While there is extensive research on the individual effect of occupations, firm quality, and job training on exit from low-wage work, a key challenge remains: to develop models that examine how these factors work together to shape workers’ pathways out of low-wage employment over time. A primary reason is data availability, as we will address later. As a result, little research uses a unified approach to examine how these characteristics interact to affect the likelihood of exit from low-wage work. By examining these factors together, in a holistic way, this research bridges existing theoretical, methodological, and empirical frameworks and contribute to develop more effective strategies for enabling individuals to move up and out of low-wage employment.