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The dynamics of low pay employment in Australia

The dynamics of low pay employment in Australia Purpose – The purpose of this paper is to enhance understanding low pay dynamics of Australian employees, with a focus on the determination of low pay duration. Design/methodology/approach – The study draws on a representative longitudinal survey of Australian households to provide empirical findings from both descriptive analysis and econometric modelling. Findings – The results show that workers who have entered low pay from higher pay also have a higher hazard rate of transitioning to higher pay; and those who have entered low pay from non-employment are more likely to return to non-employment. Union members, public sector jobs and working in medium to large size firms tend to increase the hazard rate of transitioning to higher pay, while immigrants from non-English speaking countries and workers with health problems have a lower hazard rate of moving into higher pay. There is some evidence that the longer a worker is on low pay, the less likely he or she is to transition to higher pay. Originality/value – This study addresses an information gap regarding the determination of low pay duration. The findings help identify workers who are at high risk of staying on low pay or transitioning into non-employment and are therefore informative for developing targeted policy to help the low paid maintain employment and/or move up the earnings ladder. The results also suggest that policy intervention should take place at an early stage of a low pay spell. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

The dynamics of low pay employment in Australia

Cai, Lixin
International Journal of Manpower , Volume 36 (7): 29 – Oct 5, 2015
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References (57)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0143-7720
DOI
10.1108/IJM-01-2014-0008
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to enhance understanding low pay dynamics of Australian employees, with a focus on the determination of low pay duration. Design/methodology/approach – The study draws on a representative longitudinal survey of Australian households to provide empirical findings from both descriptive analysis and econometric modelling. Findings – The results show that workers who have entered low pay from higher pay also have a higher hazard rate of transitioning to higher pay; and those who have entered low pay from non-employment are more likely to return to non-employment. Union members, public sector jobs and working in medium to large size firms tend to increase the hazard rate of transitioning to higher pay, while immigrants from non-English speaking countries and workers with health problems have a lower hazard rate of moving into higher pay. There is some evidence that the longer a worker is on low pay, the less likely he or she is to transition to higher pay. Originality/value – This study addresses an information gap regarding the determination of low pay duration. The findings help identify workers who are at high risk of staying on low pay or transitioning into non-employment and are therefore informative for developing targeted policy to help the low paid maintain employment and/or move up the earnings ladder. The results also suggest that policy intervention should take place at an early stage of a low pay spell.

Journal

International Journal of Manpower – Emerald Publishing

Published: Oct 5, 2015

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