LoWER3 FinalReport FIN - archive.uva-aias.netarchive.uva-aias.net/uploaded_files/regular/LoWER3FinalReportFIN.pdf · Anu Laas and Kaia Philips at University of Tartu, Estonia 16

LoWER European Low-Wage Employment Research Network

506480

LoWER3

The Insecure Perspectives of the Low Skilled in the Knowledge Society

Coordination Action 6th Framework Programme – Citizens and Governance

Final Report

Start date of project: 1 July 2004 End date: 30 April 2008 May 2010 Wiemer Salverda, Co-ordinator

Amsterdam Institute for Advanced Labour Studies AIAS Universiteit van Amsterdam

Please note that the report cites without detailed reference and formal quotation the particular journals and books that have resulted from the network activities.

LoWER3 Final Report The insecure perspectives of the low-skilled

2 of 143


3 of 143

The partners of the network are a significant group of experienced researchers of the labour

market, affiliated to leading scientific institutions in most EU member states. They study

labour markets with an open mind, paying attention to its broader context – notably including

the demand side –, to international comparisons, and to research contributions made from

outside the network. They are well versed in mutual cooperation and maintain appropriate

contacts with US researchers.

LoWER3 European Low-wage Employment Research network

Contractual Partners (2004–2008)

1. Wiemer Salverda, Joop Hartog, Marloes De Graaf-Zijl and Aslan Zorlu (earlier Maite Blázquez Cuesta, Anne-Laure Mascle Allemand) at AIAS, University of Amsterdam, Netherlands

2. Mary Gregory, Andrew Glyn* and Martin Ruhs at University of Oxford, UK 3. Ronald Schettkat at Bergische Universität, Wuppertal, Germany 4. Jo Blanden, Abigail McKnight, Frank Cowell, Stephen Machin and Jonathan Wadsworth at CEP

and STICERD, London School of Economics, UK 5. Brian Nolan at Economic and Social Research Institute ESRI, Dublin, Ireland 6. Andries de Grip and Didier Fouarge (earlier Jasper van Loo) at Researchcentrum Onderwijs-

Arbeidsmarkt ROA, University of Maastricht, Netherlands 7. Thomas Zwick (and at the start Miriam Beblo) at Zentrum for Europäische Wirtschaftsforschung

ZEW, Mannheim, Germany 8. Rita Asplund at ETLA Research Institute for the Finnish Economy, Helsinki, Finland 9. Ioannis Theodossiou at University of Aberdeen, UK 10. Ive Marx at University of Antwerp, Belgium 11. Peter Sloane and Melanie Jones at WELMERC, University of Wales, Swansea, UK 12. Stephen Bazen and Mareva Sabatier at Université de Savoie, Annecy (replacing Université de

Bordeaux), France 13. Claudio Lucifora, Simona Comi and Lorenzo Cappellari at Università Cattolica, Milan, Italy 14. Ana Cardoso at Institute for Study of Labour IZA, Bonn, Germany 15. Anu Laas and Kaia Philips at University of Tartu, Estonia 16. Niels Westergård-Nielsen at Århus School of Business, Denmark 17. John Schmitt at CEPR Washington, USA 18. Irena Kotowska, Anna Matysiak and Pawel Strzelecki at Warsaw School of Business, Poland *) With great sadness the network reports that Andrew died in December 2007. It acknowledges his

important role as a network member from the start in 1996. The Oxford Review of Economic Policy, 25:1, commemorates his many contributions to economic analysis.


4 of 143

The network has continued its tradition of involving interested colleagues as associates. For

LoWER3 the following persons have acted as such.

LoWER3 European Low-wage Employment Research network

Associate Members (2004–2008)

Miriam Beblo at Berlin School of Economics (FHW) (after leaving ZEW) Maite Blázquez Cuesta at Universidad Autonoma de Madrid, Spain (after leaving AIAS) Sara Connolly at School of Economic and Social Studies, University of East Anglia, Norwich,

United Kingdom Yves Flückiger at Université de Genève, Switzerland Markus Jäntti at Abo Akademi University, Finland Florence Jany-Catrice at Faculté Sciences Economiques et Sociales Université de Lille 1, France Mark Keese at Directorate Employment, Labour and Social Affairs ELS, OECD, Paris, France Antje Mertens at Berlin School of Economics (FHW) Daphne Nicolitsas at Bank of Greece Brian Nolan at University College Dublin (after leaving ESRI) Sophie Ponthieux at INSEE, France Giovanni Russo at Università degli Studi di Trieste, Italy Michel Sollogoub at TEAM Théorie et Applications en Microéconomie et Macroéconomie

Université Panthéon-Sorbonne Paris I, France Doris Weichselbaumer at University of Linz, Austria Patrick Werquin at Directorate for Education EDU, OECD, Paris, France

More information about the activities, publications and other accomplishments, history,

related projects and membership of the network can be found at the network website:

www.uva-aias.net/lower or obtained from the network Coordinator: Wiemer Salverda at the

Amsterdam Institute for Advanced Labour Studies (AIAS) of the University of Amsterdam.


5 of 143

Contents

Executive summary 7

How did LoWER3 develop ? 7

What are the main research findings ? 8

Which progress was made to existing knowledge ? 11

What issues remain to be tackled in the future ? 12

Discussion of policy implications 16

1. Background and objectives 23

Lay out of the report 25

2. Scientific description of results and methodology 27

2.1 Introduction: the interest of the low-skilled 27

Low pay and low skills 28

2.2 Mobility 35

Earnings mobility, individual risks of low pay, industries and firm behaviour 35

Intergenerational mobility and household poverty 43

2.3 Gender 47

Female employment growth, skills and age 47

Women, part-time hours and low pay 50

Earnings mobility 55

Part-time and low-pay spells and occupational choice in women’s careers 56

Motherhood, employment and pay 59

Fertility and employment participation 63

2.4 Training, age and immigrants 64

Educational attainment, employment and part-time hours 65

Low pay, earnings mobility and skills 68

Training, the low skilled and job insecurity 71

Age, training and low pay 75


6 of 143

Immigrants, skills, low pay and labour-market assimilation 81

2.5 Unemployment, the macro-economy, institutions and policies 87

3. Summary and conclusions for policy and further research 92

3.1 Main research findings 93

3.2 Progress of research and future agenda of unresolved issues 95

3.3 Policy implications 101

4. Dissemination 108

Policy conference 108

Written publications 108

LoWER3 Conferences and workshops 109

Website 109

Newsletters 109

References 111

Annex 1. LoWER3 network deliverables 115

Annex 2. LoWER3 network membership 118

Annex 3. LoWER3 network activities 120

Table A.3.1 Conferences and workshops 120

Table A.3.2 Keynote speakers and special discussants at conferences and workshops 121

Table A.3.3 Contributions to conferences and workshops 123

Table A.3.4 LoWER3 network reports and publications 135

Annex 4. Cumulative list of LoWER network events and publications since 1996 138

Events in chronological order during the phases corresponding with LoWER1, 2 and 3.

138

Publications in systematic order, indicating origin in LoWER1, 2 and 3 or related

projects 140


7 of 143

Executive summary

To put it up front the strong overarching policy conclusion of the project reads that it is very

important to consider the mutual, reinforcing linkages between female employment, part-time

employment, low-wage and low-quality employment, and to no longer advocate the stimulus

of part-time jobs regardless of their characteristics and effects.

This summary spells out concisely, first, how the project has elaborated on activities and has

reinforced results reached in previous projects that had been funded from the 4th and 5th

Framework Programmes. This is followed by an overview of the research results obtained

covering the areas of part-time work, female labour, poverty, training and socio-economic

institutions. Thirdly, it indicates the progress that was made and the issues that warrant further

research. Last but not least it discusses various policy implications of the results. These

implications regard inequality and poverty, part-time employment, gender effects in the

labour market, education and training, the human resources policies of firms, and last but not

least the macro-economy and the role of institutions for determining relevant economic

outcomes. The one sentence found at the start above is only the highest possible distillate of

these.

How did LoWER3 develop ?

With the support of the 6th Framework Programme, LoWER3 (August 2004 – April 2008)

has extended the European Low-wage Employment Research network by a third phase –

following two preceding phases (LoWER1: 1996–1998, LoWER2: 2000–2004) which had

received support from the 4th and 5th Framework Programme respectively. Since its start 12.5

years earlier the network has consistently brought together studies of the functioning of low-

wage labour markets in a broad setting that embraces labour demand and product demand,

and policies and institutions, and is based on a strong internationally comparative perspective.

The LoWER research portfolio includes among others:


8 of 143

• low pay and low skills,

• minimum wages and employment,

• wage inequality and earnings mobility,

• gender equality in (low) pay and (part-time) labour markets,

• service-sector demand patterns and aggregate employment,

• poverty and social protection,

• training and employer behaviour,

• labour-market institutions, and

• the meso-economic and macro-economic background to low-wage employment.

Over the three phases the approach has been result-driven and it has met with considerable

success, witness

• the organisation of 27 conferences and workshops, and

• the production of 8 books with leading scientific publishers, 4 special issues of

scientific journals, 3 special reports to the Commission, 2 dissemination books and 11

working papers (see Annex 4), with a direct bearing on labour and social policy.

During the third phase of activities reported here, 12 of the above 27 meetings were held. This

led to the publication of 3 journal issues, 4 working papers and, as the culmination, the wide-

ranging state-of-the-art Oxford Handbook of Economic Inequality – apart from one book that

dated back to the second phase (LoWER2) but was actually published in 2005. From the

studies conducted during this phase this report has brought together the insights and findings

in the preceding chapter. Below we now, first, summarise those, and subsequently bring to the

fore the issues in need of further research, and, finally, discuss their possible policy

implications.

What are the main research findings ?

The network set out in 2004 to study mobility – intra- and intergenerational –, gender, and

training, and linked this to the macro-economy and the role of institutions and policies which


9 of 143

provide an important context. Invariably, this was done in relation to low pay, low skills and

inequality. Other important dimensions of the studies concerned households, age, and migration.

Five main findings can be summarized as follows.

The first issue on which LoWER3 has made significant progress concerns part-time

employment. Its level is high to very high in certain countries and increasing in most. However,

research shows that the shorter working hours are the higher the incidence of low pay is, with

surprisingly small international differences given significant aggregate differences in low-wage

incidence. In addition, earnings mobility is reduced for part-time workers compared to full-time

workers. A part-time pay penalty also seems to substitute for the gender pay penalty. The effect

on female pay is much the same as women are strongly overrepresented in part-time

employment. Workplace segregation was found to contribute significantly to the full/part-time

earnings gap for both males and females; part-time employees work in more feminized

workplaces and their earnings are lower. Clear negative effects have been found in a dynamic

perspective for the earnings careers of women when they change from full-time to part-time

employment. Such penalties last well after resumption of full-time hours. Mothers’ right to

work reduced or flexible hours while staying with the same employer leads to very different

outcomes from right to ‘request’ which need to be ‘considered’ only by the employer. The

individual right of reducing working hours in the same job without a negative effect on pay may

help spreading part-time jobs more broadly across job levels and the economy and therewith

ultimately reduce the effects of occupational segregation that keep women prisoner of low-wage

jobs.

Evidently very closely related to this is the position of women. They generally face a higher

incidence of low pay and a lower upward mobility out of low pay. However, international

differences are important and particularly in Denmark the female risk of low pay is least and the

situation of adult women resembles rather closely that of their male counterparts. Childbearing,

career breaks, part-time work and the acceptance of low pay, even if temporarily by intention, all

have life-cycle implications for women. A consistent finding is that motherhood imposes

earnings penalties on women, and that these can be substantial and lasting. A range of

channels are identified: foregone work experience and dislocation of career trajectories due to


10 of 143

maternity breaks or the switch to part-time work, self-selected segregation into lower-paying

‘female’ occupations and workplaces to match working time to domestic schedules or reduce

human capital depreciation during breaks. Differences across occupations in the rate of skill

depreciation during employment breaks and corresponding profiles of gender segregation and

wage differentials across occupations may be identified in many countries, suggesting

common motivations.

The employment and wage effects of fertility- and motherhood-friendly policies of longer

parental leave and increased part-time employment, which have the objective of promoting

gender equity in employment, are themselves potentially damaging for mothers’ employment

status.

At the lower end of the household-incomes distribution, what does or does not work in

fighting poverty appears to depend heavily on context. Reforms to reduce household

joblessness would cause big drops in child poverty in some countries, but would hardly have

any effect in other countries. The same applies to policies aimed at reducing single-

earnership. Nowhere, however, would boosting employment – an increasingly popular policy

instrument – suffice to bring child poverty down to the level of the best-performing countries.

Countries that perform best in this respect are the ones that already ‘before tax and transfer’

enjoy comparatively low levels of child poverty; in addition they have tax and benefit systems

that are comparatively effective at reducing these levels. There is a good deal of overlap in

being a good performer in both respects.

Low skills have strong low-pay effects, in Denmark and the Netherlands in particular. There is a

potentially enhanced intergenerational persistence of inequality as a result of increased

participation in higher education, which strengthens the relationship between family

background and educational attainment. Outcomes correspond with deprived backgrounds,

and cognitive abilities are not more important than self-esteem, personal efficacy and

concentration. The important effects of young age as well as state dependency (that is, being

previously low paid) on the probability of being low paid serve to underline the largely

overlapping position of the low paid, the low skilled and youths vis-à-vis continuing training.


11 of 143

In a perspective of the coherence of socio-economic institutions and the concomitant diversity

of capitalism in OECD countries, two popular reform strategies were subjected to empirical

tests. Firstly, the supposed complementarity of the strategy of deregulating product markets

and making labour markets more flexible is put into doubt. It may not be enough to transform

political economies based on different principles into liberal market economies. Secondly, the

reform strategy that combines flexibility in labour markets with security through social

protection may not lead to an economically efficiency arrangement. Active labour-market

programmes rather than diminished employment protection would seem to be the crucial

element to combine with a generous welfare state in the search for labour-market efficiency.

Which progress was made to existing knowledge ?

The LoWER3 project has ventured extensively beyond the state of the art in several ways.

First, it refined the knowledge of low pay and extended this across many countries. From

the network’s fruitful link to the activities of the Russell Sage Foundation project Low-wage

Work in Europe, from the efforts it put in the Oxford Handbook of Economic Inequality, and

from the further elaboration on that in the Oxford Review of Economic Policy, it can be

concluded that the main dividing line between countries with lower and higher rates of low-

wage employment does not run any longer between Europe or the Continent on the one hand

and the USA on the other but can be clearly observed within the European Union. In this

respect Germany has, with a rapid increase in recent years, moved to join the notorious band

of countries with a high incidence of low pay such as the UK and the US. At the same time

countries such as Denmark and France have managed a persistently much lower or even

declining incidence. Their incidence is close to 10 per cent of employees while that of the

high-incidence countries is between 20 and 25 per cent.

Secondly, the network brought together different strands of empirical research to consider

the combined effects on low pay. The rise of part-time employment and of female

employment and the problems of mobility out of low earnings largely overlap ,and all point in

the direction of aggravating problems of low pay. The work of LoWER added to the standard

comparison of part-time to full-time employment in cross-section – which generates the

familiar pay penalty for working part-time –, a dynamic comparison of women who over time

change from a full-time job to a part-time one (and back). In many cases, they incur a pay


12 of 143

penalty which turns out to be persistent and not easily remedied by a later return to a full-time

job.

What issues remain to be tackled in the future ?

These conclusions would not be complete without stating that important questions remain for

further research in many respects. Before discussing these in more detail we need to stress the

dearth of detailed comparative data. Regarding the coverage of data and the ease of accessing

them the European Union lags far behind the US and signs of improvement seem

contradictory. The network did exploit the European Community Household Panel (1994–

2001) data to the full but much to its regret had to stop the detailed analysis of low pay in the

year 2001. After that year the ECHP was discontinued. Its replacement with the new EU-

SILC dataset has left a substantial gap in time and the latter provided also much less of the

detail needed for the same type of studies of low pay that were performed on the basis of the

ECHP. In addition, fully comprehensive European structure of earnings data, which match

firm and employee information, are not forthcoming. Though some progress has been made,

witness the very fact of the increased regularity of the surveys and their extension to other

branches of industry, the restriction to firms with at least ten employees remains a crucial

hindrance to any adequate study of low pay. In the low-wage labour market small enterprise

and the self-employed play a very significant role which as a result escapes proper scrutiny

with these data. We now turn to issues for further research.

First, in the field of intragenerational mobility research a major challenge for future research

is to find out what in the family other than income is important for the future of children.

Maybe the now very active research in behavioural economics and neuro-economics will

provide a deeper understanding of the causes of strong family income associations.

The study of intergenerational inequality is relatively undeveloped in comparison to the cross-

sectional inequality literature, due in part to more stringent data requirements. High-quality

person-based panel data are still relatively rare. And past efforts to assemble uniform ex ante

panel datasets across countries have met with mixed success. Enhancing current country-

based panel data and building new ones in other countries is necessary for better

understanding of economic mobility over time as well as other types of dynamic social


13 of 143

processes. Despite their relative scarcity, greater use of existing panel data for cross-national

comparative purposes is still possible. Few studies have used multiple measures of well-being

across countries. Contrasting different measures of well-being within and across countries in

integrated studies should increase our understanding of the role of different institutions

(labour markets, family, and government) in contributing to mobility over time and in the

reduction of inequality.

As existing panel data sets have matured and administrative files have become more

accessible, the intragenerational mobility literature has begun to examine whether mobility

has changed over time. This literature is progressing rapidly in the United States. Few studies

exist for EU countries and no comparative international study has explored temporal patterns

of mobility. The largest gap in the intragenerational mobility literature is the lack of

systematic attempts to relate mobility to policy-relevant variables. Studies focusing on

patterns of mobility across demographic subgroups have examined the role of taxes and

transfers. Extending these studies to explore the roles of specific public programmes and

behavioural mechanisms would provide a major advance within the literature on

intragenerational mobility.

Second, at the more practical level, the maintenance and improvement of data quality

regarding poverty remain imperative. Some population groups prone to poverty and social

exclusion remain underrepresented in surveys, migrants for example. Income and deprivation

measurement generally needs to be further developed and refined, with panel data being an

essential ingredient despite the problems associated with panel attrition. The more

fundamental challenges lie in deepening our understanding of the processes at work at

individual, household, national, and cross-national level. While much has been learnt about

the characteristics associated with poverty in different countries, the fact that this differs so

widely across countries provides a window into the nature of the underlying processes that

has not been fully exploited. In the same vein, studying the factors associated with change

over time in a specific country is valuable but putting these changes in a comparative

perspective adds another dimension. So a panel-of-countries approach has increasing potential

as the statistical underpinning in terms of comparable data continues to be built. This can be

complemented by continued development of the potential to carry out micro-simulation


14 of 143

analysis in a comparative perspective; the challenge of incorporating behavioural responses

into such analysis remains substantial. Exploiting the potential of panel data will continue to

be a priority, for example to reliably distinguish those genuinely and persistently on low

income, and understanding the barriers to income smoothing facing those on low income

more transiently.

The growing recognition of the multidimensional nature of poverty and social exclusion

points to the need to further the understanding of the linkages between different forms of

deprivation and exclusion, moving beyond descriptive analysis of the extent to which they go

together to the study of the processes that underpin the underlying relationships between them

– where once again a comparative perspective is invaluable – and also addressing the difficult

conceptual issues involved.

Third, for research on the gender dimension not the least question is what the implications are

for the incentives for women to acquire a better education? Given the fact that not all part-

time jobs carry pay penalties it will be helpful to know the options of stimulating high-level

part-time jobs to alleviate the pressures of skill-mismatch. Speaking about gender and

economic inequality more broadly, the Oxford Handbook mentions the need for further

research on the sudden and pervasive increase in women’s participation in education and on

the future of customary female specialisation in household labour when a continued

narrowing of the gender pay gap would further reduce the basis this has in opportunity costs.

In the end economic analysis of gender inequality may need a new paradigm of female

identity formation through the joint determination of education, employment, and fertility.

Fourth, regarding firms making better data available is the first priority. In general, better

theoretical models are needed, and it is to be hoped that there will be new theoretical work

that can be applied to such data. The great variation in outcomes for low-wage across

industries provides strong evidence that “one size does not fit all” when it comes to studying

the low-wage labour market. Further research should focus more deeply on an industry-by-

industry analysis. In this vein, it is worth noting that important insights can be gleaned from

working with qualitative researchers, who understand the forces affecting the labour market in

a deeper fashion than can be apparent from examining large-scale datasets.


15 of 143

Fifth, on migration, given the complexity of the effects and causes that the relationship

between migration and inequality involves, research on the causal effects of migration on

inequality in the host and sending countries as well as on world inequality is urgently

required. Though already many parts of this link are understood, the big picture is unclear,

partly due to the lack of data. Some of the specific issues that need further attention include (i)

the effects on sending countries generated by the brain drain, (ii) the inter-relationships

between immigration, immigration policy, attitudes towards immigrants, and immigrants’

labour-market outcomes, and (iii) the interactions between immigrant assimilation, ethnic

capital, and immigrants’ labour-market outcomes.

Finally, concerning the macro-economy and institutions, there is a great need, particularly at

this juncture, to fight scholarly over-specialisation and unify the different branches of

economics. Theoretically, the aggregate analysis of the distribution needs to look at both

profits and the wages of heterogeneous workers. Growth theory, macroeconomics, and labour

economics are all part of the mix. Empirically, the national accounts need to be brought closer

to micro-data on households.

Important issues for future research regarding factor-income shares of labour and capital

include, first, an improved collection of data and, second, a deeper analysis of trends and

country differences using uniform methods for measuring the labour share, cross-section and

intertemporally. Combination with other (new collections of) long-run statistics, such as those

on top incomes, can improve understanding of how the labour share has evolved and would

reveal the extent to which the USA is a special case, where the share has remained roughly

unchanged. The analysis can be extended in two directions: understanding the dynamics of

the labour share itself on the one hand, and its relation to the distribution of personal incomes

on the other. Long-run trends in labour shares can be related to structural change and political

shifts. An obvious example is the great reversal in trend from around 1980 onwards.

Institutional changes and differences such as union bargaining power, product market and

capital market deregulation come to mind most readily in this context, but also differences

and trends in industrial composition as, for example, the high share of financial services in the

UK and USA, of manufacturing in Germany, and of tourist services in certain other countries.


16 of 143

As to institutional determinants of unemployment more comprehensive analysis of

interactions through the estimation of non-linear models is advocated by Bassanini and Duval

as this might be more informative, at least of relationships prevailing for the average country

in the sample.

Esping-Andersen and Myles (2009) in their Oxford Handbook study of the welfare state

and inequality conclude to the need of a comprehensive approach in order to adequately

assess welfare-state redistribution. At a minimum, such an approach needs to incorporate

taxation, income transfers, and services, and to also take care of the counter-factual problem.

Additionally, it should be recognized that income inequalities, poverty, and government

responses are surely also a function of the society’s underlying demography and social

composition. Some countries are more aged than others or have far higher rates of lone

parenthood. Thus similarly committed welfare states may produce different results or need

additional redistributive efforts to reach the same end-result. As yet, no single study

adequately incorporates all the above issues. A priority for future research is to address the

counter-factual problem more comprehensively. To meet this challenge we need to develop a

simulation methodology that allows us to obtain a more reliable and realistic picture of how

market-based inequalities are patterned by the welfare state. This can yield major insights into

the influence of welfare states on the market-based distribution of income.

Discussion of policy implications

We can draw a number of implications from the above results that may inspire policy makers in

relation to low pay across six important fields: inequality and poverty, part-time employment,

gender effects in the labour market, education and training, firm human resources practices, and,

finally, the macro-economy and the role of institutions.

Inequality and poverty

Low pay is an important element of cross-section inequality and, through higher or lower

mobility out of low pay up the earnings ladder, also of lifetime inequality. There appear to be

both important variations and similarities in the incidence of low pay across different economies.

The levels may vary but the same groups (women, youths, immigrants, low-skilled) and

employment segments (retail trade, hotels and catering, personal services, part-time jobs) are


17 of 143

universally overrepresented in low pay, sometimes to surprisingly similar degrees. Direct

descriptives and deeper analysis controlling for a coincidence of effects tell the same story.

International differences in earnings mobility, however, seem to be more limited, also in

comparison to the USA. We look at the general aspect here and return to the gender, skills and

age dimensions below. Important differences are found in the within-low-pay distribution, or in

other words the length of the low-wage tail. These seem to link only weakly to the presence of a

minimum wage, which supposedly has a compressing effect on the wage distribution. The great

international variation in the nature, structure and enforcement of statutory minimum wages

may help explain the disparities in the low tail of the distribution of wages, and any EU policy

initiative regarding the minimum wage should take that into account and perhaps focus first on

equalising the form a minimum wage can take before discussing its level. For example, the most

recent, simple, and widely advertised British and Irish minimum wages seem to be relatively

effective in providing a minimum threshold of pay.

Going beyond low pay, in the longer perspective of intergenerational, household-based

mobility and persistence of inequality, careful research finds, first, that nature and nurture

both matter for inequality transmission. These results – suggesting a minor role for the

neighbourhood and small causal effects of parental income – do not rule out that policy

interventions in the neighbourhood or parental income can be effective. But such

interventions should not be expected to generate substantial changes in the relationship

between family background and income. Second, relatively low and stable intergenerational

mobility is found to link to a strong persistence of households at the top of the (Italian)

distribution. All findings underline a continued need for policy making.

Finally, in fighting poverty countries that perform best are the ones that already ‘before tax

and transfer’ enjoy comparatively low levels of child poverty; in addition they have tax and

benefit systems that are comparatively effective at reducing these levels. There is a good deal

of overlap in being a good performer in both respects, and here lies an important problem: the

worst-performing countries have the double hurdle to overcome of both reducing pre-

transfer/tax poverty levels and putting in place more effective tax/transfer systems.

Concerns about possible work and self-sufficiency disincentive effects of more adequate

benefit systems have always proved a major obstacle to benefit improvements. As many


18 of 143

studies show, effective marginal tax rates for people on benefits with limited earnings

capacity can be prohibitive. Yet it is also clear that benefit adequacy and good labour-market

performance can go together. Denmark manages to combine one of the highest levels of

minimum-income protection with a very high labour-participation rate. Other Nordic

countries demonstrate that high minimum-income protection can co-exist with high labour

participation and low unemployment, when combined with strictly imposed and socially

sanctioned requirements regarding participation in training and job search programs, which,

moreover, are extensive.

Part-time employment

Part-time employment is high in some countries and increasing in most. Such growth is an

important aim of policymaking. It seems important when advocating growth of part-time jobs to

convey a focus on jobs with more substantial hours and aim at reducing the role of small jobs.

Clear negative effects have been found for the earnings careers of women when they change

from full-time to part-time employment, which last well after resumption of full-time hours. The

British experience sends a serious warning on the role of institutional context. Mothers’ right

to work reduced or flexible hours with the same employer leads to very different outcomes

from British mothers’ right to ‘request’, which need only be ‘considered’ by their employer.

The implication is to more strongly endorse the individual right of workers of reducing working

hours in the same job without any negative effect on pay. This may, in due course, help

spreading part-time jobs more broadly across job levels and the economy and therewith reduce

the effects of occupational segregation by gender ultimately. It will be a long process though and

more political action will be needed.

Gender

If women make choices which seem to them to best balance their commitments to providing

family care and engaging in paid employment, should we be concerned? Women are

progressing through advanced and professional education in growing numbers, often

outperforming young men, and clearly investing in preparation for careers. Underutilising this

human capital is socially inefficient; under-rewarding it is inequitable.


19 of 143

Though generally female employees face a higher incidence of low pay and a lower mobility

out of low pay, international differences are important and much may be learnt from the Danish

example where the female risk of low pay is least and the situation of adult women resembles

rather closely that of their male counterparts.

Childbearing, career breaks, part-time work and the acceptance of low pay, involve a nexus

of decisions on working hours, employer, occupation and childcare, shaped by individual

preferences as well as market opportunities. A consistent finding from the research reported

here is that motherhood imposes earnings penalties on women, and that these can be

substantial and lasting. On the employment and wage effects of fertility and motherhood the

main policy message is that family-friendly policies of longer parental leave and increased

part-time employment, which have the objective of promoting gender equity in employment,

are themselves potentially damaging for mothers’ employment status. Underutilising this

human capital is socially inefficient; under-rewarding it is inequitable. The contribution of

family-friendly policies to women’s employment status is constrained by the acute gender

segregation in childcare responsibilities; it is mothers, almost exclusively, who reduce or

adapt their labour supply, incurring wage penalties. However, that pattern may be about to

change, notably with Germany now following Sweden in allocating two designated ‘daddy

months’ of parental leave available only to fathers on a ‘use it or lose it’ basis. That raises the

intriguing question: will the wage penalty for meeting parental responsibilities continue for

women and extend to men if or when fathers as well as mothers are involved? Since the

majority of women are also mothers, gender and maternity issues heavily overlap. The role of

women in child-bearing and child-rearing currently leads to a life-time's difference in

economic status. But the majority of men are also fathers. Rebalancing responsibilities for

caring may help reveal how far there are strictly gender issues in labour-market outcomes.

Education and training

In the words of Stephen Machin (2009), the worsening labour-market position of less-skilled

workers stresses the need for government policy to devote resources towards increased and

improved skill formation and education acquisition. Education and training policy need to be

formulated with this in mind so as to ensure that future generations of workers entering the


20 of 143

labour market (and current workers requiring training) possess the skills needed to utilize

modern-day technologies in the workplace.

Policy makers seeking to raise intergenerational mobility need to be aware of a

potentially enhanced persistence of inequality resulting from increased participation in

higher education, reflecting the strengthening relationship between family background and

educational attainment. This suggests a need for resources to be directed at programmes to

improve the outcomes of those from deprived backgrounds, either by universal interventions

that are more effective for poor children, for example high quality pre-school childcare, or by

directing resources exclusively at poorer schools or communities. These programmes should

not be exclusively on cognitive abilities but also towards self-esteem, personal efficacy and

concentration. The results also suggest an urgent need to address the problem of youths who

are not in education, employment or training (NEET), owing to the strong link between

parental income, early unemployment and future earnings. The important effects of young age

as well as state dependency, i.e. being previously low paid, on the probability of being low

paid serve to underline the need to radically improve the position of the largely overlapping

low paid, low skilled and youths vis-à-vis continuing training.

Firms’ human resources policy

Though there is a dearth of good (panel) data linking firms and employees, especially at the

EU level, results suggest, first, that accounting for firm characteristics makes a very

significant contribution to understanding workers’ pay and earnings mobility, and, second,

that there is enormous and persistent heterogeneity in firm human-resources practices which

also have clearly substantial impacts on workers of all skill levels. Firm provision of training

was also found to be part of a broader approach to work motivation, job satisfaction and trust

with positive effects on cooperation in times of organisational change. These results,

combined with the fact that firms that have poor practices are more likely to exit, suggests that

one potential area for policy is opening up the black box of the firm and improving firm-level

human resources practices.


21 of 143

Macro-economy & institutions

Atkinson’s (2009) plea to unify the different branches of economic analysis is a plea for a

more integrated look at policy making at the same time. The link between macro and micro is

essential, and economics has suffered from allowing these to go their separate ways.

Monetary policy in Germany was shown to have been constraining of economic growth in

recoveries. Once path dependence is allowed for (through individual sorting, skill

depreciation, and other mechanisms) unemployment may be difficult to reduce after high

unemployment has persisted for a certain period. This process, however, is not an argument

against a more expansionary policy, but is in favour of it because inactivity will cause high,

long-lasting costs and should be taken into account for future monetary policy. Holmlund

observed that the extremely contractionary monetary policy in Sweden in 1992 appears to

have had strong and long-lasting effects on unemployment.

In a perspective of the coherence of socio-economic institutions and a concomitant

diversity of capitalism in OECD countries – emphasizing the socio-political compromise

upon which the institutional architectures of the modern economies are built – , Amable

subjected several reform strategies to empirical tests. These appear not to support, first, the

existence of a complementarity between deregulated product markets and flexibilized labour

markets. The implementation of some market-based structural reforms, even in conjunction

with one another, may not be enough to transform political economies based on different

principles into liberal market economies. Secondly, the reform strategy attempting to combine

flexibility in labour markets with security through social protection may not lead to an

economically efficiency arrangement. Active labour-market programmes rather than

diminished employment protection would seem to be the crucial element to combine with a

generous welfare state in the search for labour-market efficiency. In addition, the political

conditions for the stability of such a flexicurity strategy are also questionable as welfare-state

institutions are generally associated with institutions that protect workers, such as

employment-protection legislation.

Bassanini and Duval find relatively robust evidence of broad reform complementarities

and the importance of the institutional context. The magnitude of such reform

complementarities appears to be moderate for the “average” OECD country, however, and no

firm conclusions can be drawn as regards the impact of specific, individual interactions across


22 of 143

institutions which have been singled out by previous empirical literature. Therefore, one

should avoid drawing firm conclusions from simple models featuring only a few ad hoc

interactions.

Howell and Rehm single out for further scrutiny generous unemployment benefits which

lie at the heart of the conventional explanation for persistent high unemployment, and

conclude that the available evidence does not offer compelling support. The effects of benefit

generosity on work incentives are more ambiguous in a broader behavioural framework in

which workers get substantial disutility from unemployment (given income) and know that

unemployment has scarring effects in the future. Policy reforms that reduce benefit generosity

in order to reduce the duration of worker unemployment spells have ambiguous implications

for overall national unemployment and employment rates: these programme reforms may just

substitute uncompensated unemployment for those who had been compensated; or they may

increase worker discouragement and reduce labour-force participation. We conclude that a

rethinking of policy measures for unemployment benefits is advisable.


23 of 143

1. Background and objectives

The LoWER3 project provided the third phase (2004–2008) of activities of the European

Low-wage Employment Research network LoWER. The network originally started in 1996

(to 1998), with the support of the Targeted Socioeconomic Research programme (TSER,

FP4), and was then continued for a second phase (2000-2004) with the help of the Socio-

economic Key Action (SEKA, FP5).

The overarching objectives of the LoWER3 activities were to stimulate:

1) the undertaking of new cooperative and comparative research, primarily between the

members of the network but also with outside experts, on the rapid and radical changes that

are occurring in the functioning of present-day labour markets and work organisations and

especially the way these affect the role of skills – both the skills required by the jobs and

those offered by labour supply, and

2) the discussion about new results of research concerning these subjects starting from an

internationally comparative point of view and in a scientific as well as a policy perspective,

involving network members together with other scholars and policy makers on both ends

(as partners in the debate and as contributors of results).

This particularly regarded developments towards and potential effects of a knowledge-based

society. In the low-skilled and low-paid labour market the structures of working time (part-

time jobs), skills (both overeducation and lack of continuous training) and households

(worklessness, intergenerational inheritance) and the embeddedness in other activities such as

household care or participation in education are evolving rapidly, with strong interactions,

seemingly to the disadvantage of low-skilled persons and of social cohesion.

Network activities and research were structured in four themes:

o Earnings mobility and employer behaviour,

o Household worklessness and intergenerational transmission of inequalities,

o Gender and skills, and


24 of 143

o Skills and training, including those of immigrants and the competition of students in

low-wage labour markets.

During the project period the LoWER3 activities did make good progress according to the

original schedule (July 2004 – June 2007) which was later amended with further activities and

deliverables and extended for another 10 months (to April 2008). This concluding report

presents the results that have been obtained and discusses the implications and dissemination.

The network is extremely grateful to the European Commission and its officers for their

continued encouragement and financial support, to the participating institutions for

accommodating the many meetings and their support to the network members, and to the

many colleagues from outside the network for their participation in the activities and their

contributions to the results, in particular those who supplied the keynote lectures and special

comments during the phase reported here:

A.B. Atkinson, Oxford University

George Borjas, Harvard University

Giorgio Brunello, University of Padova

Michael Burda, Humboldt University Berlin

Daniele Checchi, University of Milan

Sheldon Danziger, University of Michigan

Daniela Del Boca, CHILD and University of Turin

Christian Dustmann,(University College London

Yves Flückiger, University of Genève

Denis Fougère, CNRS and CREST, Paris

Heidi Hartman, Institute for Women’s Policy research, Washington

Joop Hartog, University of Amsterdam

Markus Jäntti, Åbo Akademi University, Finland

Julia Lane, National Opinion Research Center and University of Chicago

Stephen Machin, University College London


25 of 143

Susan Mayer (University of Chicago)

Stephen Nickell (Nuffield College Oxford)

Ronald Oaxaca, University of Arizona

Inga Persson, Lund University

Emilio Reyneri, University Bicocca Milan

Eugene Smolenky (University of California, Berkeley)

Robert Solow, Massachusetts Institute of Technology

Eckhard Wurzel, OECD

Klaus Zimmermann, IZA Institute for the Study of Labour, Bonn

The network also likes to express its gratitude towards the Equalsoc Network of Excellence

for the fruitful cooperation for the Seville conference in 2007 and the Oxford Handbook of

Economic Inequality, and for the Policy conference held in Brussels in 2009. Fruitful relations

were also maintained with the Russell Sage Foundation’s Low-wage Work in Europe project

and the Linked Employer-Employee Data (LEED) project which was financed by the

European Commission’s DG ESA.

Lay out of the report

Publications in books and journals are the main vector of disseminating the results of the

network activities. All of these have now been published, mostly between February and May

2009. The present report does not aim to reproduce their contents in extenso but instead

summarises the main points and discusses their context and significance for policy making as

well as for future research. In addition, the report draws on some of the unpublished

contributions, particularly papers presented at some of the meetings. For precise quotations

the reader is referred to that underlying literature.

The report follows the main structure of the work and distinguishes between three main topics

which are summarily indicated as mobility – taking the first two research themes together –,

gender, and training, followed by a fourth overall topic that concerns the broader context of

unemployment and the macro-economy and institutions and policies. Chapter 2 focuses on the


26 of 143

results arranged in accordance with this fourfold distinction. Chapter 3 discusses the scientific

progress, the main conclusions and potential policy implications. Chapter 4 records what has

been undertaken to disseminate the findings. This main text is followed by three annexes that

subsequently list the LoWER3 deliverables, its membership, the twelve conferences and

workshops that have been organized including the almost 240 individual contributions made

to these, and the publications, which comprised 45 contributions, that have come out of this. It

concludes with a fourth and final annex that cumulatively lists the events and publications

over all three phases of the LoWER network supported by the Fourth, Fifth and Sixth

Framework Programmes respectively.


27 of 143

2. Scientific description of results and methodology

2.1 Introduction: the interest of the low-skilled

The societal position of low skilled people has been of increasing concern in recent decades.

In a perspective that knowledge and skills will be playing not simply an increasing role but a

predominant role in society – an expectation underlying the very coining of the concept of the

knowledge-based society –, the further evolution of their position and the possible or

impossible mending of the concerns about the low skilled are essential to social cohesion. The

individual positions of the people concerned may be negatively affected but so may society as

a whole. The functioning of the labour market seems key to the undermining of the low

skilled’s position. Increasingly, not least because of rising employment participation rates for

women, the labour market is central to any person’s achievement of well-being. Jobs and

incomes depend on it and they go hand in hand with direct (e.g., benefits, health insurance)

and indirect entitlements (e.g., household formation, social status). Effects on society may be

found in discouragement of human capital formation, depressed work ethic, erratic voting

behaviour or voting abstinence, increased violence and criminality, etcetera. In the labour

market and society at large formal skills have gained great importance and the acquisition of

those by the population has grown very rapidly. Certainly, the shares in the population of

those without qualifications have decreased but they are far from disappearing entirely.

Neither have the low-skill jobs vanished. There is a good case for analysing the role of the

low-skill segment of employment in relation to the future development of European societies.

Low-skill and low-wage employment are important from a policy point of view but they are

also highly interesting scientifically. They constitute an area where a whole array of factors

interferes and mutually interacts, such as education and training, social security and benefits,

wage formation and minimum wages, health and working conditions, immigration and

ethnicity. By way of introduction, we dwell summarily on a few major trends characterising


28 of 143

this segment of employment, which will be further detailed in the rest of the chapter, and,

second, end with a short indication of the network’s activities and accomplishments as they

correspond with the subsequent sections.

Low pay and low skills

Low pay and low skills are largely overlapping but certainly not identical categories, if only

because workers’ low pay is primarily a cross-section concept while their level of skills

comes with a history. They have a history, first, because of their human-capital building over

time, e.g. through on-the-job learning. Secondly, the meaning of a given level of skills or

educational attainment can change over time because either its content may be modified by

the educational system or a given level is attained by a different selection of the population.

The latter may be particularly relevant to lower levels of skills as the rapidly increasing

participation in education may help to take the more talented individuals to a higher level now

while before they stayed put at a lower level and could at best develop their skills on the job.

Thus, the rapid increase potentially implies an equally rapid negative sorting of those now

remaining at lower levels. This level issue is as an important caveat as little can be done about

it.

Starting at the pay side, Figure 2.1.1 pictures how the incidence of low pay among employees

has evolved over time and across countries if we cast the net internationally as wide as

possible across the USA and Europe by using the earnings-distribution data gathered by the

OECD. The picture confirms the general perception that the USA experiences a higher

incidence of low pay than the European countries. However, several European countries such

as Hungary, Poland, the UK and Ireland, are not far below. By contrast, the Nordic countries

show much lower rates, less than half of the American. Experiences also contrast over time,

where the US level was already the highest in the 1970s and has moved very little while

European countries have moved up considerably including not only the current high-level

ones just mentioned but also Germany and the Netherlands, and even Denmark to some extent

so it seems.


29 of 143

Figure 2.1.1 Incidence of low pay* among employees (%), 1977–2005

3

7

11

15

19

23

27

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

US

PL

HU

UK

IE

DE

ES

CZ

NL

AT

DK

FI

SE

*) Defined as less than two-thirds of median earnings, which have variable definition – see below. Source: OECD.Stat, Decile rations of gross earnings database. Figure 2.1.2 Incidence of low pay among the population* aged 15–64 (%), 1977–2005

0

3

6

9

12

15

18

21

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

US

PL

HU

UK

IE

DE

ES

CZ

NL

AT

DK

FI

SE

*) Using employment-population ratios, which implies attributing the same incidence of low pay to the self-employed. This may be an underestimate in general given the higher concentration of self-employment in low-paying industries and for Europe compared to the US given the greater importance of self-employment in many European countries (compare Salverda & Mayhew, 2009, Table 5). Source: Figure 2.1.1, and Eurostat and OECD Labour Force Surveys.


30 of 143

Figure 2.1.2 puts this evolution on a per capita basis accounting for the evolution of the

employment-population rates for those of working age (15 to 64 years) which diverge

significantly between countries. It widens the distance between the USA and Europe and

brings the European countries closer together as it reduces the relative levels in Eastern

Europe and lifts those in the Nordic countries and the Netherlands. It makes little change to

the evolution over time. It is clear from both figures that the importance of low wages has

trended upward in most countries.

However, it should be stressed that the earnings data used by the OECD are not perfectly

comparable internationally and can actually be quite different, depending on the national data

sources used. They concern different concepts (hourly, weekly/monthly or annual wages) on

the one hand, and different selections of the employee population (including or excluding

part-time workers or part-year workers) on the other hand. The divergences affect levels as

well as trends. Usually, annual wages of full-time full-year workers (the Swedish data) will

show a much lower rate of low pay than if hourly wages of all employees are used. An

example of the way this affects trends is given below by the Netherlands: between 1979 low-

pay incidence among full-time workers remained basically unchanged, and much below

average, at 10%, while that including part-time workers grew from 10 percentage-points to 17

(compare Figure 2.3.3). For this reason extensive use will be made in the following sections

of much more precise comparisons derived from the European Community Household Panel

(ECHP) data, in spite of the two major disadvantages of this database: it ends in 2001 and it

does not cover the new member states1.

Figure 2.1.3 elaborates on the low-skill side of the picture, for the same countries shown

above except the USA and for the period since 1995 only. Low skills are defined as less than

senior secondary education (ISCED levels 0–2). Note that these data are head-count figures

which ignore that part-time hours are usually more concentrated among the low-skilled. First,

the low-skill share among the employed differs widely from a surprisingly low level of 6% in

Czechia to a more than seven times higher level in Spain. Notably, in all countries the shares

tend to fall, more strongly (in percentage-point terms) when the level is higher, thus bringing

them closer together. Naturally, the ratio of the low-skilled employed to the working-age 1 At the same time it offers improved coverage of EU15 compared to OECD.


31 of 143

population of all skills (not shown) is much lower than their employment share but the levels

are equally wide apart between countries; they seem more stable though, thus showing less of

a narrowing between the countries.

Figure 2.1.3 Share of low skilled among the employed, ages 15–64, (%), 1995–2005

0

20

40

60

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

ES

NL

DK

IE

UK

FI

DE

SE

HU

PL

CZ

Source: European Labour Force Survey

Employment/population ratios among the low-skilled population (Figure 2.1.4) show rather

different levels and more stable trends. The three countries from Eastern Europe appear to

have much lower ratios than the nine EU15 countries, where there is little difference now

between Denmark, UK, Netherlands and Spain at the top, around 60%. In Poland and Czechia

rates tend to decline while several of the other countries show clear increases (e.g. Spain,

Netherlands, Finland). Apparently, there is no prima facie indication for a strong deterioration

in low-skilled employment rates. This conclusion does not change when the low-skilled

employment rate is compared to the better-skilled population (Figure 2.1.5), which cluster

together in a much narrower range, between 74 and 83%, except Hungary (68%) and Poland

(65%). This figure also tells us that the countries with a high absolute employment rate for the

low skilled do better for this group also relative to the higher skill levels.


32 of 143

Figure 2.1.4 Low skilled employment/population ratio, ages 15–64 (%), 1995–2005

0

20

40

60

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

DK

NL

UK

ES

SE

AT

IE

FI

DE

HU

PL

CZ

Source: European Labour Force Survey Figure 2.1.5 Low skilled employment/population ratio relative to all skills, ages 15–64

(%), 1995–2005

0.0

0.3

0.5

0.8

1.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

UK

ES

DK

NL

SE

AT

IE

FI

DE

HU

PL

CZ


We come back to the overlap between low pay and different levels of skills in Section 2.4,

with the help of microdata; it is no use comparing the two sides of the story here because of


33 of 143

the aggregate nature of the data. What they certainly underline is that the two sides are not

identical, with regard to levels nor to trends.

Figure 2.1.6 Share of persons, ages 18-59, in jobless households (%), 1996-2007

0

2

4

6

8

10

12

14

16

18

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

HU

PL

UK

DE

FI

IE

DK

AT

NL

CZ

ES

Source: Eurostat, Structural indicators

Finally, Figure 2.1.6 adds that the above is not obviously related to household joblessness.

The Czech Republic with its low absolute and relative level of employment among the low

skilled shows at the same time one of the lowest rates of joblessness. Apparently, other

members of the household can make up.

Before continuing with the major themes in the next four sections we very concisely list the

activities that have been undertaken and the publications that have resulted for each of these.

The underlying detail can be found in Annex 3.


34 of 143

Summary overview of activities by theme: Meetings, contributions and publications Theme Meetings Contributions Publications

[W1] Workshop in London, February 2005

20 contributions Earnings Mobility and Intergenerational mobility / households

[W3]Workshop in Annecy, December 2006

4 keynotes 15 presentations

B.E. Journal of Economic Analysis & Policy, 7 (2), 2007

OHEI Chapters on Inter- and intragenerational mobility respectively, Poverty, and Household time use

Reflets et Perspectives de la vie économique, 46 (2-3), 2007, 47–63

LoWER Working Papers 11 and 12

Gender [W2] Workshop in Warsaw, November 2005

1 keynote 15 presentations

[C4] Conference in Volos, September 2007


8 articles in Oxford

Economic Papers, Special Issue, “Women and Work”, 61:S1, April 2009

OHEI Chapter on Gender LoWER Working Paper

10 Training / Migration [C1] Annual

Conference 2005 in Mannheim, April 2005


[C3] Annual Conference 2007 in London, April 2007


[W4] Workshop in Berlin, March 2008


8 articles in Labour Special

Issue “Job Insecurity and Training”, 23:S1, February 2009

OHEI Chapters on Education and Immigration

LoWER Working Paper 9

[C2] Annual Conference 2006 in Århus, April 2006


[C5] Inequality Conference, Seville, September 2007

26 presentations 4 main discussants

Unemployment/Macroeconomy, Institutions/Policies

[C6]Conference, Amsterdam, April 2008

1 keynote 9 presentations

All of Oxford Handbook of Economic Inequality (OHEI), February 2009

OHEI Chapters on Earnings distribution and Low Pay

8 articles in Oxford Review

of Economic Policy, “Capitalism and Inequality”, 25:1, May 2009


35 of 143

2.2 Mobility

LoWER3 has further developed the study of earnings mobility, a tradition which goes back to

the very start of the network in 1996 and led to a first publication with Asplund, Sloane and

Theodossiou (1998). Mobility was the main focus of the Annecy workshop [W3]. Here, at

several annual conferences and at the Seville conference [C5] more than 55 contributions

were made. This led to the publication of two Handbook chapters and several journal articles.

Mobility is an expanding subject that started from intragenerational mobility, particularly the

moving of employees into and out of low pay, following their employment and pay histories

over as many years as the data allow. Later it began to cover a second type of mobility, from

one generation to the next. The former type links to the probability of individual workers of

being low paid, while the latter associates with the dynamics of household poverty and

joblessness. We discuss both in this order.

Earnings mobility, individual risks of low pay, industries and firm behaviour

For a start, we stress that low pay is defined following OECD and EU conventions as

comprising all levels of pay situated below a threshold of two-thirds of median pay. The focus

is consistently on hourly pay with the aim of enabling the inclusion of part-time jobs (defined

as <35 hours per week) whose hours diverge from full-time jobs (which, by the way, can also

differ significantly in terms of hours worked, from, say, 35 to 60 hours per week).

Maite Blázquez (2006) analyzes the dynamic nature of the relationship between earnings

mobility, job mobility and changes in contractual arrangements between permanent and

temporary jobs for Spain. This is the country with by far the highest rate of temporary

contracts and effects of contractual arrangements may be better measurable here than

elsewhere2. Results show that overall job mobility contributes to increasing earnings mobility,

and that moving from temporary to permanent employment status is associated with earnings

upgrading overall – especially for low-wage workers. Opposite changes, from permanent to

temporary employment, tend to be more strongly related with downgrading, when individuals

remain with their current employer. Secondly, earnings mobility appears to remain mostly

2 Another advantage is the relatively large size of the Spanish ECHP sample.


36 of 143

unchanged over time, although clear differences, both in terms of levels and trends, can be

perceived among different types of workers.

Table 2.2.1 Individual probabilities of being low paid*, 1995–2001 AT BE DK FI FR DE GR IE IT NL PT ES UK US Female 0.505 0.437 0.186 0.350 0.458 0.474 0.360 0.239 0.194 0.430 0.364 0.371 0.412 0.456Age ≥30 & <45 yrs -0.371 -0.403 -0.633 -0.788 -0.552 -0.309 -0.522 -0.413 -0.412 -0.597 -0.217 -0.381 -0.313 -0.250≥45 & <65 yrs -0.167 -0.286 -0.728 -0.801 -0.422 -0.004 -0.550 -0.427 -0.545 -0.346 -0.234 -0.467 -0.186 -0.329Education Secondary -0.272 -0.185 -0.433 -0.346 -0.090 -0.363 -0.095 -0.160 -0.115 -0.426 -0.201 -0.206 -0.244 -0.342Tertiary -0.276 -0.577 -0.712 -0.636 -0.389 -0.661 -0.238 -0.334 -0.125 -0.857 -0.396 -0.383 -0.320 -0.629Part-time 0.019 0.055 0.055 0.101 -0.017 0.071 -0.096 0.136 -0.200 0.292 0.219 -0.085 0.170 0.130Temporary contract 0.128 0.150 0.041 0.226 0.348 0.005 0.265 0.207 0.282 0.334 0.256 0.251 0.169 n.a. Tenure ≥ 5 yrs -0.169 -0.132 -0.056 -0.025 -0.223 -0.137 -0.111 -0.020 -0.105 -0.023 -0.027 -0.048 0.002 n.a. Occupation Legislators, senior officials and managers. -0.072 -0.456 -0.076 -0.205 -0.090 -0.042 -0.080 -0.075 -0.032 -0.076 0.178 -0.201 -0.186 -0.181Professionals -0.068 -0.327 -0.171 -0.569 -0.267 -0.134 -0.079 -0.290 0.011 -0.168 -0.061 -0.235 -0.356 -0.166Technicians and associate professionals. -0.018 -0.075 -0.074 -0.031 -0.114 -0.011 0.038 -0.179 0.017 -0.174 -0.078 -0.031 -0.180 -0.049Service workers shop/market sales workers 0.309 0.378 0.461 0.258 0.455 0.302 0.166 0.311 0.286 0.311 0.381 0.279 0.529 0.319Craft and related trade workers 0.199 0.362 0.247 0.239 0.246 0.234 0.270 0.219 0.310 0.155 0.370 0.197 0.211 0.202Plant and machine operators and assemblers 0.260 0.344 0.266 0.363 0.342 0.156 0.119 0.149 0.166 0.285 0.159 0.178 0.494 0.045Elementary occupations 0.407 0.420 0.403 0.579 0.527 0.304 0.311 0.285 0.413 0.386 0.401 0.306 0.620 Sector ** Services1 0.077 0.449 0.177 0.241 0.147 0.216 0.120 0.208 0.083 0.144 0.050 0.206 0.453 0.389Services2 0.041 0.062 0.071 0.178 0.015 0.060 -0.027 -0.013 0.063 0.085 -0.104 0.146 0.061 -0.015Services3 -0.054 0.167 0.133 0.247 -0.014 0.041 -0.066 0.022 -0.054 -0.021 -0.056 0.060 0.041 0.110Low pay in previous year 1.308 1.442 1.281 1.197 1.303 1.371 1.023 1.064 1.116 1.695 1.731 0.856 1.617 1.242Constant -0.781 -0.917 -0.487 -0.709 -0.729 -0.766 -0.463 -0.588 -0.886 -0.688 -1.557 -0.710 -1.379 -1.043Notes: Bold values are significant at the 5% level. The occupational classification for PSID differs from ECHP and available waves PSID are not fully identical. Reference category: males aged less than 30 years, with a lower education, working full-time on a permanent contract, in 7 types of occupations in industry (= agriculture, manufacturing, utilities and construction). *) Low pay is defined as below a threshold of two-thirds of the country median hourly wage. **) Sector of activity: the three services industries are: 1. trade and hotels and catering, 2. transportation and other private business services, 3. public services. The sector of industry is the reference category. Reference category: low-skilled males aged 16 to 30 and working full-time in a permanent job as a clerk outside the services sector who were not low paid in the year before. Calculations on ECHP and PSID, with many thanks to Maite Blázquez and Daniella Brals. Source: Salverda and Mayhew, 2009, Table 7.


37 of 143

Building on her work Salverda and Mayhew (2009) expand the analysis of low pay and

earnings mobility to 13 EU countries and the USA, making use of longitudinal individual data

of ECHP for the EU countries and Panel Study of Income Dynamics (PSID) for the USA.

Their results provide the most extensive and precise comparison of EU countries to date

leading to a comprehensive set of new stylized facts. Unfortunately, as already noted it ends –

with ECHP – in 2001 as it cannot be applied anytime soon to its successor dataset (EU-SILC)

because of the number of subsequent panel waves needed for observing earnings transitions in

sufficient numbers for a proper analysis.

This section presents all details but restricts discussion to general aspects and to the

relation with industries as a means to connect to employer behaviour. The next two sections

will highlight specific results, paying special attention to gender and part-time employment,

and training respectively. A special feature of the present approach is the use of the ECHP

with full coverage of (employee) jobs including those working in jobs of less than 15 hours

per week who are mostly left out in ECHP-based research.

Table 2.2.1 gives a detailed overview of the effects of different variables on the

probability of individual workers of being in a low-wage job, depending on characteristics of

the person as well as of the job. They result from the application of a five-probit model

developed by Jenkins and Cappellari (2004) which accounts best for the problems involved in

studying mobility, particularly the endogeneity of initial conditions, selection into

employment and sample attrition3. The estimations basically bear out the often very

outspoken features of low pay found in descriptives.

At the general level, the most important finding for each and every country is the large

effect of state dependence: being low paid in the previous year contributes more than anything

else to an individual’s current low pay, albeit with some international variation – least in

Spain and most in the UK and the Netherlands. Descriptives (see Table 2.2.2) show the very

important role of certain service industries which taken together comprise between 30% and

50% of all low-paid employees in any country. In many countries their incidence of low pay

is well above average, especially in Denmark, Netherlands, UK and USA. The low-wage

affliction of these industries is borne out by the estimations of Table 2.1.1 (see Services1).

Risks of low pay are higher in all countries, albeit not significantly in the cases of Austria and 3 Blázquez and Salverda (2009) discuss these issues and the exact use of ECHP and PSID in more detail.


38 of 143

Portugal. The UK and USA again figure prominently now joined by Belgium, while in the

Netherlands and Denmark the situation in services seems mitigated by large effects of age and

skill.

Table 2.2.2 Low pay* in selected industries, 2001 AT BE DK FI FR DE GR IE IT NL PT ES UK USAll 13 13 12 10 15 23 18 20 10 23 11 18 22 24Share of total low pay in industries Trade** 24 17 15 17 17 19 25 22 21 23 18 21 27 24Hotels, catering 13 8 6 6 7 5 12 13 5 8 10 9 15 17Personal services 12 14 20 10 8 7 11 13 10 7 13 15 5 12Total 37 35 42 39 32 31 38 37 33 38 39 32 47 52Concentration of low pay among industries (Overall incidence = 100) Trade** 75 106 150 74 120 156 120 103 155 177 148 64 189 153Hotels, catering 157 241 353 158 258 255 167 169 216 241 159 173 298 249Personal services 65 89 198 102 205 158 70 66 28 168 37 32 126 168Total 108 132 188 115 155 166 134 122 135 186 127 98 202 179*) Low pay defined as below two-thirds of median gross hourly earnings excluding payroll taxes and employer contributions. **) Unfortunately, ECHP does not split the trade sector between wholesale and retail. From other sources it appears that most of low pay is found in the latter while the situation in the former is close to the national average. Calculations from ECHP and CPS (courtesy John Schmitt at CEPR Washington). Note that, in contrast to most other outcomes based on ECHP, employees working less than 15 hours have been included here, using the variable PE005 (not available for France where small jobs are trivial in number). Source: compare Salverda and Mayhew, 2009, Table 13. Table 2.2.3 Annual transition chances into and out of low-pay* and better-pay** states,

1995–2001 AT BE DK FI FR DE GR IE IT NL PT ES UK US All Low pay t-1 Remaining in low pay 0.600 0.502 0.488 0.377 0.492 0.601 0.535 0.538 0.468 0.619 0.593 0.409 0.580 0.532Escaping to better pay 0.258 0.336 0.293 0.335 0.344 0.256 0.290 0.284 0.368 0.249 0.296 0.359 0.276 0.411Leaving to non-employment 0.142 0.172 0.229 0.314 0.171 0.145 0.182 0.182 0.166 0.136 0.117 0.243 0.148 0.079Better pay t-1 Remaining in better pay 0.894 0.867 0.887 0.857 0.870 0.895 0.850 0.870 0.873 0.903 0.891 0.836 0.870 0.869Falling to low pay 0.033 0.052 0.030 0.038 0.048 0.035 0.053 0.047 .0.033 0.042 0.034 0.051 0.061 0.081Leaving to non-employment 0.074 0.081 0.083 0.105 0.082 0.070 0.097 0.082 0.094 0.055 0.076 0.113 0.069 0.050*) Low pay defined as below two-thirds of median gross hourly earnings excluding payroll taxes and employer contributions. **) Better pay is any pay above the low-pay threshold. Source: Salverda and Mayhew, 2009, Table 8.


39 of 143

Such a cross-section picture of the probability of being low paid is necessarily static and may

differ from the perspective of individual careers, i.e. earnings mobility over time. The

probability estimates shown above allow assessing the likelihood of earnings (im)mobility on

an annual basis using individual transitions between years – in the same category of low (or

better) pay, moving to the other pay category or leaving employment altogether. Results pool

over the entire duration of ECHP to maximise the number of observations of earnings

transitions which are insufficient to consider changes over time (see Table 2.2.3).

It turns out that there is comparatively little difference between the countries in the extent

to which employees remain in a low-paid job. The likelihood is lowest, at around 40%, in

Spain and Finland. In the other countries it ranges from 47–49% in Italy, Denmark and France

to 60–62% in the Netherlands, Germany and Austria. Interestingly, there is little difference

between the US, which has a very high aggregate incidence of low pay, and Denmark which

has a very low level (see Figure 2.1.1). However, the type of transition, to either a better-paid

job or non-employment, shows much more variation internationally. Notably, the chances of

moving up the earnings ladder are higher in the USA while, unsurprisingly, dropping out to

non-employment is relatively unusual in that country. The likelihood of remaining in a better-

paying job shows little difference across countries. US workers are slightly more likely to fall

back from better pay to low pay than European workers. Transitions from better pay to non-

employment are within a narrow band, again with the USA at the lowest level, and they are

always below those of the low paid.

This brings into play the within-distribution of the low-wage segment and how it compares to

the rest of the earnings distribution. Table 2.2.4 indicates that the low-wage tails are much

longer in some countries (US, NL, DE) than others (BE, FI, GR, IE, IT, PT, UK). In other

words, in the latter group of countries there is more compression of the earning distribution

just below the threshold, In Finland, Ireland and Portugal half of all low paid are found at no

more than 10% below the threshold. Those at the mean of low pay in these countries would

need, on average, a pay rise of 12% to reach the low-pay threshold. This contrasts with an

average 44% increase needed in the US, Germany, the Netherlands and Denmark. The USA

stands out as a country with very low low pay and a very wide low-wage distribution, the first

decile of low-wage earnings being situated at only 22% of the threshold.


40 of 143

Minimum wages, given as a percentage of the low-pay threshold, only weakly compress the

distribution of low pay and often substantial parts of the low-wage tail are found below them.

This is hardly surprising since no two minimum wages are equally structured, with the

exception perhaps of the most recent Irish and British ones. Legislation and regulations vary

dramatically from country to country (Vaughan-Whitehead, 2008a) and so does enforcement.

For example in the Netherlands there is an elaborate and frequently used system of youth

minimum wages which are much lower than the adult rate and it has the highest age (23

years) at which the full rate starts to apply (Salverda, 2008b). Legal definitions of the relevant

wage also diverge significantly: between hourly, weekly or monthly pay, and between

inclusion and exclusion of tips or overtime earnings; sometimes (Greece) they still take

household characteristics into account.

Table 2.2.4 Earnings distribution among the low paid, head count, 2001 AT BE DK FI FR DE GR IE IT NL PT ES UK USWithin low-wage tail

Coefficient of variation 0.29 0.14 0.22 0.13 0.25 0.35 0.13 0.14 0.14 0.36 0.14 0.17 0.17 0.41

Decile 1 as % of LPT 39 71 50 70 46 33 66 68 67 32 66 60 61 22Decile 5 as % of LPT 79 87 71 89 81 69 86 90 86 70 90 83 81 67Decile 9 as % of LPT 97 97 95 99 97 97 96 97 97 95 98 98 96 93D9:D1 2.48 1.38 1.91 1.41 2.10 2.99 1.46 1.44 1.46 2.98 1.50 1.64 1.59 4.33

mean as % of LPT 73 84 72 86 76 67 83 85 83 66 86 81 80 63

minimum wage as % of LPT 80 88* 95 87 77

25–84# 102 57 79 55

Notes: head-count figures; 1% of tails were clipped at both ends of the distribution; LPT = Low-pay threshold *) Agreed minimum wage in collective agreements (Westergård-Nielsen, 2008). #) The tail of youth minimum wages starts at age 15 at 30% of the adult minimum wage attained at age 23. Source: Salverda and Mayhew, 2009, Table 9 and .Figure 8.

To further develop the firm dimension, or employer behaviour, in low-wage analysis Lane

(2006) looks at the promises, and problems, of using matched employer-employee data on the

American side. Such data now mean that the research community can examine the impact of

the demand side. Much was already known about the effect of relatively crude employer

characteristics such as industry and firm size on earnings. Traditional surveys of workers that

measure the “kitchen sink” of demographic characteristics - such as education, occupation,

age, sex, marital status and even include some firm characteristics such as firm size and


41 of 143

industry – are typically able to explain some 30% of earnings variation. By contrast,

longitudinal data on workers and firms explain about 85% of earnings variation.

New stylized facts are emerging about the impact of personnel policies, such as wage

premia, worker turnover, as well as of changes in product demand, such as technological

change, demand shifts and competitiveness. Firms within very narrowly defined industries

can be very heterogeneous in the type of workforce that they choose. These choices are not

random – they persist many years later. Why do firm effects differ? More research is needed

to determine this, but work by Haltiwanger, Lane and Spletzer (2006), as well as by Abowd et

al. (2004) suggests that some firms pay a premium because they choose to operate with a

high-quality low-turnover workforce; others the reverse. This might be due to a higher level

of capital in the firm, or to unionization, compensating differentials or, finally, to human

resource policies chosen by the firm, including the effects of training and promotion policies

as well as compensation. In general, lower-quality job ladders are associated with firms that

have high worker turnover, that are small and shrinking. Higher quality ladders are associated

with large, growing firms. Even when a company offers good job ladders, only a select group

of workers may be able to move “up” onto these ladders, and men experience better job

ladders than women. High turnover firms seem to follow an “up or out” strategy. Women are

less likely to have “good jobs” than are men. Within each industry, women's job ladders in

general start at a lower initial level and have slower earnings growth; even with the same

education level, although the impact of economic turbulence does not differ noticeably by

gender.

Salverda (2007) elaborates on the European side, asking attention for the very lack of

good internationally comparable data, especially for the analysis of the low-wage segment of

the economy due to severely incomplete coverage of small firms and certain industries by the

European Structure of Earnings Surveys and their difficult comparison over time. He stresses

that this type of firm-focused research is only just beginning warranting the conclusion that

we still “know surprisingly little about the low-wage labour market along certain

dimensions.” (Andersson et al., 2005: 2). In the end questions such as whether the low-wage

outcomes are competitive or not are or what the role of rent-sharing (or its absence, contrary

to other parts of the economy) in the low-wage labour market is, may in due course find a

better answer with the help of data that include the firm. Bolvig (2005) clearly demonstrates


42 of 143

the importance of accounting for the firm as she can link the likelihood of escaping low pay to

the sector/firm in which the low-paid person is employed. Another illustration, pertaining

directly to the analysis of institutions, is given by Lam et al. (2006) who examine the way the

UK minimum wage affects the pay structure of relevant companies, by wage compression or a

broader uplifting of wages above the minimum wage. New analyses focus on the role of a

firm’s wage bill and the significant effects on this of the pay of employees who leave or join

the firm (Duhautois and Kramarz, 2006). A direct analysis of firms operating low pay and

minimum wages seems an important direction for research to pursue. There is virtually no

information on the frequency in the universe of firms of paying low or minimum wages to

their employees or the frequency with which they do so, nor about the specific characteristics

of firms that actually do so. How firms react in this respect to the economic situation or the

labour market is largely uncharted territory too. For example, depending on the economic

cycle does the frequency of low or minimum pay among firms change or do the same firms

vary the frequency among their personnel?

This firm perspective will not alter the relevance of the underlying questions mentioned at

the beginning of this section but it potentially affects the answers, lending firm characteristics

a role that may otherwise be left unexplained or mistakenly attributed to the characteristics of

individual workers.

However, even if good matched panel data come about they will have clear limitations.

Evidently, they would be inadequate on their own for grasping the interactions between low-

wage employment and non-employment (such as e.g. the low-pay-no-pay cycle which is one

of the stylized facts of the analysis of low pay), because of their restriction to firms and

people in employment. Proper information about the origin of new hires and destination of

leavers from the firm may provide some compensation in this respect.

Burkhauser and Couch (2009) look at intragenerational mobility beyond low pay in a broader

perspective of inequality. A consistent finding in the intragenerational mobility literature is

that inequality declines (due to mobility) as years are added to the analysis. Nonetheless, these

studies find that the majority of initial economic inequality remains. The best evidence

indicates that between 10 to 40 percent of cross-sectional inequality is transitory. While more

research is needed, they infer that most studies across the USA and European countries find


43 of 143

no clear relationship between greater cross-sectional inequality and greater intragenerational

mobility, and that all studies find that inequality falls as the time frame expands regardless of

the measure of welfare or countries considered, and that most of the reduction usually occurs

in the first few years. However, a large degree of permanent inequality remains. The sparser

studies using alternative measures of well-being suggest that the decline in inequality

systematically varies with the measure of income used. The few studies looking at trends in

long-term mobility find little change over the past several decades in the United States.

Because the basic methodologies for measuring mobility are well developed,

intragenerational mobility researchers have a common language to describe their findings.

Despite the very high quality of the early work which developed the most common measures

of mobility, the discussion of what is meant by the word mobility continues. The ongoing

importance of this topic as an area of research is demonstrated by the recent work of Fields

and Ok (1999) which identifies the role of economic growth in income mobility.

Intergenerational mobility and household poverty

Three papers presented at the LoWER3 Annecy Mobility workshop of December 2006, and

later published in the B.E. Journal of Economic Analysis & Policy and Economic Journal

respectively, together with two chapters of the Oxford Handbook contributed important new

insights into intergenerational mobility and poverty.

Björklund, Jäntti and Solon (2007) attempt to learn more about why intergenerational

transmission is as strong (and as weak) as it is, what are the causal processes underlying the

associations between parents’ and children’s socioeconomic outcomes. The theoretical

literature distinguishes between ‘nature’ and ‘nurture’. The former basically goes back to the

transmission of genes, the latter focuses on the environment in which children grow up –

more investments in and example-setting for education, health and perhaps behaviour by

higher-income parents –, be they advantageous or disadvantageous. A unique Swedish dataset

containing information on both adoptive and biological parents, also if the latter do not rear

the child, including their socioeconomic status, enables a simple approach to sort out the two

issues. They conclude that both nature and nurture have played important roles – with the

careful caveat that this holds for Swedes born between 1962 and 1965 who are captured by

the dataset.


44 of 143

Piraino (2007) uses retrospective information on parental economic status to focus on the

contribution of education to the intergenerational persistence of income and the main mobility

patterns across the distribution, aiming to add a new and specific country case to the growing

set of intergenerational studies. His findings qualify Italy as a low-mobility or high-

persistence country among advanced societies. A substantial part of the intergenerational

coefficient is not accounted for by the fact that children from rich families are also more

educated, in other words children with the same level of formal education have unequal

chances in the labour market depending on family background. The transmission of economic

status appears to be particularly strong at the top of the income distribution.

Blanden et al. (2007) explore the contributions of education, ability, non-cognitive skills

and labour-market experience to generating intergenerational persistence in the UK and ask

whether this can help to understand why persistence has increased between the two cohorts

(1958 and 1970) of their dataset. They find that these variables account for half of the

association between parental income and children’s earnings for the 1970 cohort. Inequalities

in achievements at age 16 and in post-compulsory education by family background are

extremely important in determining the level of intergenerational mobility. Both cognitive and

non-cognitive skills contribute to the role of education in generating persistence, accounting

for 10% and 20% of intergenerational persistence respectively. Attachment to the labour

market after leaving full-time education is another substantive driver of persistence. The

variables also account for 80% of the 1958–1970 rise in persistence, largely through the

increased relationship of family income with education and labour-market attachment. A

growing imbalance in access to expanding higher education by family background is partly

responsible for the decline in intergenerational mobility in the UK. Of interest for the nature-

nurture debate is that they find no substantive contribution of cognitive ability, which may be

thought to relate to nature.

Björklund and Jäntti (2009) sum up possible economic approaches suggesting that there

are many causal processes behind intergenerational income associations, which interact in

many ways that can only be captured in very complex models. For example, parental

behaviour in the presence of public education programs likely depends on whether these are

substitutes or complements. It is therefore unsurprising that different theoretical models offer

different predictions about the relationship between intergenerational mobility and cross-


45 of 143

sectional inequality and the impact of public education programs. Ideally, the models should

be subjected to empirical tests, but they are often far too complex and data demanding for

structural estimation and testing. However, some useful partial evidence is available, so the

literature offers some clues as to which mechanisms are more important than others. It is their

contention that by offering a rich set of stylized facts, empirical research can tell us what

mechanisms are important, which can in turn sharpen future theoretical research. Putting

empirics to work, there is also no simple answer to the question of what is a reasonable

measure of long-run income for intergenerational income mobility studies as the answer also

depends on how one wants to measure mobility.

Recent research on income and family background has produced several valuable insights.

We know that family background, in a broad sense that encompasses community and

neighbourhood influences, is important for income during adulthood. Estimates of sibling

correlations show that their shared family and/or community background factors account for a

sizeable fraction of variation in long-run income – but with substantial differences in

importance across countries and substantial intertemporal changes within countries. Changes

found in the importance of family that have been traced to changes in the educational system

suggest that the impact of family background is not a given constant but is susceptible to

cultural and political differences and changes. However, one should be cautious. For example,

comparisons of neighbourhood and sibling correlations show that the family is much more

important than the neighbourhood. What then is it in the family that is important? Once again,

it is easier to say what is not important than to put one’s finger on the decisive causal

mechanisms. Attempts to disentangle the true causal effect of parental income from the

statistical correlation between parents’ and off-spring’s income suggest that the causal effect

accounts for no more than at most half the correlation.

Persistence is also an important dimension of the discussion about poverty, which in addition

is linked to the household level. In their overview Nolan and Marx (2009) indicate that few

countries have managed to make great headway in reducing poverty over recent decades, at

least as captured by the numbers falling below relative income poverty thresholds. Such long

persistence seems consistent with intergenerational transmission of poverty in principle but in

practice there is little research considering this.


46 of 143

The working poor are not just an Anglo-Saxon phenomenon, although in-work poverty

rates do tend to be higher there. This does not simply reflect the extent of low-wage – in fact,

the overlap between low-paid work and household poverty is weak, because low-paid workers

tend to live in multi-earner households. Rather, it is associated with households’ capacity to

generate more than one income, which has become increasingly necessary to stay above the

poverty threshold. Obstacles to multi-earnership relate not only to labour-market regulation

(minimum wages, restrictions on part-time and temporary employment etc.), but also to tax-

and benefit systems (work-entry disincentives implied by benefits, dual-earner penalties in tax

systems) as well as inadequate child care policies. So what matters, from a poverty

perspective, is less how work is distributed across individuals than across households. The

relationship between levels of household joblessness, or single-earnership for that matter, and

working-age poverty is stronger than any of the relationships with individual-level labour-

market indicators. Some countries would have considerably lower poverty rates if they had a

household labour participation (and socio-demographic) structure similar to Sweden’s – the

best-performing country. Interestingly, however, some countries like Germany or Canada

would have higher rates. Similarly, the impact of reducing household joblessness and

increasing double-earnership on child poverty would be generally favourable, but ranges from

very strong in some countries to negligible elsewhere. Employment growth does not always

affect the distribution of work across households in such a way as to reduce poverty. For the

period from the mid-1980s to the mid-1990s, some of the top performing countries in terms of

employment growth actually saw relative poverty rates for the working-age population rise.

Very strong employment growth in the Netherlands, for example, was accompanied by a

sharp increase in double-earnership, but household joblessness dropped only modestly and

more households on benefit fell below the poverty line. Policies to boost work participation

have aimed at improving incentives to work, but may reduce the adequacy of benefits in

preventing poverty among those who fail to benefit from employment growth. Declines in the

proportion of workless households generally contributed to lower levels of pre-transfer

poverty, but this was in many cases partly offset by reductions in the effectiveness of benefits

and transfers in preventing poverty.


47 of 143

2.3 Gender

On the issue of gender and low pay LoWER3 has organized the dedicated workshop [W2,

Warsaw, 2005] and the Special conference “What works for women?” [C4, Volos, 2007].

Taken together with various individual presentations made at other LoWER3 meetings,

including the Inequality conference [C5, Seville, 2007], almost 70 contributions have been

made that are relevant to this issue. The results most directly linked to LoWER were

published as a coherent set of eight articles in a special issue “Women and Work” of the

journal Oxford Economic Papers in April 2009, which was edited by the LoWER members

who also organized the special conference: Mary Gregory, Miriam Beblo, Ioannis

Theodossiou and Wiemer Salverda, together with the chapter on Gender of the Oxford

Handbook.

The assessment of social policies and labour-market features in the area of women and

low pay in the light of reconciling work and family pose major challenges for economic

modelling. Choices over childbearing, employment breaks, working hours and jobs have

implications which extend over much of the life cycle, requiring a dynamic perspective. The

decisions are not only complex, but typically jointly determined, raising issues of simultaneity

and endogeneity. Heterogeneity in tastes and preferences, largely unobservable, plays a

significant role. Social systems and policy environments vary widely across countries, and

function as a systemic whole as well as a set of individual provisions. This last feature,

however, is also an opportunity, providing a test-bed for examining the responses of women

where the labour market and/or social policies give a particularly appropriate context.

This section subsequently discusses the growth of female employment in relation to skills

and age, the significance of part-time jobs and low pay, the mobility of earnings among

female employees, the effects of part-time jobs and low pay on labour-market careers of

women, the employment and pay of mothers, and, finally, fertility and employment.

Female employment growth, skills and age

Improving the status of women is one of the leading socio-economic objectives of the

European Union and increasing women’s employment is a key element in the European

Union’s Employment Strategy. Across the European Union the increased employment of


48 of 143

women has already contributed the major part of the growth of employment over the past 30

years. Since 2000 the number of women in employment in EU15 has increased by no less

than 10 million, up to 77 million in 2007; this compares with 6 million for men. However, in

the 12 new member states the number of women as well as men in employment stagnated –

largely due to stagnating populations.

In 1970 women made up just over 35% of employment in the major EU economies; by the

end of the 1990s this had risen to around 45% from where it is gradually further increasing. In

the early 1970s around 50% of women of working age were in the labour force; this

proportion is now typically over 60%, and over 70% for prime-age women (ages 25-49)

alone. It is clear though from Figure 2.3.1 that in several European countries the trend towards

an increasing role for women in the labour market still has some way to run. The new member

states (“New12”) have a somewhat lower overall level of employment for women – likely

reflecting a decline from higher pre-transition levels – but the same level for prime-age

women. Levels for other ages are lower, particularly for young women who have also

witnessed a further decline after 2001 and now face a 22% rate on average as against 38% in

EU15.

Employment participation of the best-educated women is high and internationally well

comparable, and actually also very close to that of similar men – in most countries the

difference is less than 10 percentage-points. By contrast participation levels of low-educated

females are within a narrow band in some countries but differ a whole lot in others

(Figure 2.3.2). The situation is virtually identical for the two aggregates, EU15 and EU27.

Participation rates vary roughly twice as strongly for young and older women compared to

the prime-age group, but the same holds for men. Differences between old and new member

states are slight, with two exceptions: a lower variation in prime-age men’s participation and

low-educated women’s participation in old EU15 (Table 2.3.1). Also compared to USA,

participation rates are roughly on a par for prime-age women while diverging for young and

older women, though this works out differently for individual countries in combinations of

advantages and disadvantages for the USA for either young workers or older workers or for

both. Taken together, the remaining gaps may be as much a matter of age as of gender.


49 of 143

Figure 2.3.1 Employment-population rates, women aged 15-64 and 25-49, 2007

0

10

20

30

40

50

60

70

80

90

AT BE BG CZ DEDK EE ES

EU15EU27

New12 FI FR GR HU IE IT LT LU LV NL PL PT RO SE SI SK UK

15-64 25-49

Source: Calculated from European Labour Force Survey Figure 2.3.2 Employment-population rates, least- and best-educated women as % of

similar men, 2007

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

AT BE BG CZ DE DK EE ESEU15

EU27 FI FR GR HU IE IT LT LU LV NL PL PT RO SE SI SK UK

low high

Source: Calculated from European Labour Force Survey


50 of 143

Table 2.3.1 Standard deviation of employment-population rates across 25 EU countries*, gender, age and educational attainment, 2007

Women Men Both age (years) 15–24 25–49 50–64 15–64 15–24 25–49 50–64 15–64 15–64 EU25 14.2 6.1 11.0 7.3 12.6 3.1 6.8 5.1 5.6 EU15 13.9 4.9 9.8 6.9 13.6 2.0 6.6 4.0 5.4education** low medium high all low medium high all all EU25 12.3 7.4 4.0 7.3 16.3 4.9 2.0 5.1 5.6 EU15 9.2 8.4 4.0 6.9 8.6 4.9 2.2 4.0 5.4*) excluding Cyprus and Malta. **) ISCED levels 0–2, 3–4 and 5–6 respectively. Source: Calculated from European Labour Force Survey.

While this increasing involvement of women in the labour market has many positive aspects,

the above is a quantitative phenomenon and based entirely on a head count of employed

persons. A number of qualitative problems are emerging, not least in relation to the position

of the low-skilled. They relate in particular to part-time employment and levels of pay as well

as educational attainment, alone and in combination.

Women, part-time hours and low pay

In many countries full-time employment has been stagnating while the number of part-time

jobs has been growing. Unsurprisingly, the most common scenario is for part-time work for

women to be rising significantly more rapidly than full-time work, thus becoming an

increasing proportion of employment. The growth of part-time employment4 has been

particularly marked in the Netherlands, where some 45% of all workers now work part-time

and more than 75% of women. However, in virtually all countries part-time employment has

grown clearly more strongly than full-time employment since the early 1980s, leading to a

part-time share in employment of between 20 and 25% in many countries – the notable

exceptions with regard to growth being Denmark and Sweden that witnessed stagnation. Part-

time rates among female workers are relatively high – around 40% – in the United Kingdom,

Austria, Belgium and Germany, but also Sweden and Denmark, while more recently they

4 We follow the European Labour Force Survey where part-time is self-defined by the respondent for most countries and defined as less than 35 working hours per week for a few others including the Netherlands. The common US definition is also as less than 35 hours. For the treatment of ECHP, CPS and PSID below the uniform definition is as less than 35 hours. Note that there is a large concentration of workers between 30 and 35 hours which can explain the often much lower part-time rates when applying the OECD’s uniform 30-hour definition.


51 of 143

have also moved up to 30% in France. In the United States the part-time incidence among

women has been slightly declining from 26% to 22%. Finally, though part-time employment

– where it is massive – is a phenomenon found at all levels of educational attainment it is

especially important for less-educated women’s employment – being 50% more frequent than

among the best educated women in EU15.

This growth in part-time work is in many respects to be welcomed, allowing more women

to combine labour-market work and earnings with responsibilities for childcare. This is

reflected in the rising labour-market participation of prime-age women, now prominent in

part-time work. For this reason, among others, growth of part-time work is an element in the

European Employment Strategy and the Employment Taskforce recommendations. At the

same time, it is important to consider the nature of part-time employment in terms of

matching to education and skills, levels of pay and chances of pursuing a career. Frequently,

though certainly not by definition – as we will see below –, female employment and part-time

occupations are concentrated in segments of the economy corresponding with the lower

ranges of the distributions earnings and of occupational levels, typically in the service sector.

Much of the work of LoWER3 members has focused on these issues. Extensive use has been

made again of the ECHP and as a result, 2001 is the latest year for which sufficient detail is

available.

Descriptive data (Table 2.3.2) indicate an often much higher incidence of low pay among

female employees compared to males, more so among younger and older women than among

prime-age women. Though young women have a very high incidence young men have too;

consequently, the gender difference grows with age. Significant differences occur between

countries. The concentration of low pay among prime-age and older women is strikingly low

in Denmark. Though they still are more often found to be low paid than their male

counterparts, the level difference is a few per cent only. Higher female levels do not

necessarily point to unequal treatment, as women may concentrate in certain occupations and

industries where men are also low paid, or they may be less educated and still be similarly

treated as low-skilled men.


52 of 143

Table 2.3.2 Low pay* of female employees by age, 2001 AT BE DK FI FR DE GR IE IT NL PT ES UK USAll 13 13 12 10 15 23 18 20 10 23 11 18 22 24Incidence of low pay among categories 15–64 19 16 12 12 20 31 23 23 12 30 15 25 30 34 ratio to men 2.4 1.7 1.1 1.4 1.6 1.9 1.7 1.4 1.3 1.9 1.9 1.9 2.3 1.515–24 51 28 56 43 57 68 59 34 41 75 19 51 54 61 ratio to men 1.5 0.9 0.8 1.1 1.0 1.0 1.0 0.9 1.3 1.0 1.0 1.6 1.2 1.225–49 13 16 7 8 17 24 18 19 9 23 13 21 23 ratio to men 3.8 1.7 1.9 1.4 2.0 2.3 1.6 1.6 1.2 2.5 2.7 1.9 3.350–64 16 10 6 11 16 30 24 29 7 19 21 24 33 ratio to men 5.3 2.0 2.6 2.8 3.3 3.3 3.6 3.6 1.5 4.1 2.9 3.2 3.3Concentration of low ay among categories (Overall incidence = 100) 15–64 148 128 104 116 127 135 131 119 116 135 136 138 138 12015–24 386 226 474 422 369 296 334 175 409 331 175 279 247 25825–49 99 128 59 80 110 104 103 95 94 103 115 114 106 50–64 118 80 52 108 101 130 137 150 67 84 192 133 152 *) Low pay defined as below two-thirds of median gross hourly earnings excluding payroll taxes and employer contributions. Calculations from ECHP and CPS (courtesy John Schmitt at CEPR Washington). Note that, in contrast to most other outcomes based on ECHP, employees working less than 15 hours have been included here, using the variable PE005 (not available for France where small jobs are trivial in number). Source: Salverda and Mayhew, 2009, Table 6. Table 2.3.3 Low pay* and part-time employment**, 2001 AT BE DK FI FR DE GR IE IT NL PT ES UK USIncidence of low pay among part-time employees (%, head count) <15hours 27 38 61 28 61 45 54 9 62 36 22 51 6015–35 hours 14 13 10 22 20 28 15 31 9 25 30 22 38 53<35 hours 16 16 19 23 20 38 18 35 9 34 31 22 41 54≥35 hours 13 12 10 8 15 19 18 14 10 14 10 17 15 17All 13.2 12.5 11.8 10.3 15.4 23.1 17.8 19.5 10.1 22.5 11.0 18.2 22.0 23.5Share of part-time employment in low-wage employment (%) head count 22 29 38 34 21 35 14 49 15 64 19 20 49 39fte 12 14 19 20 14 17 7 29 9 42 11 10 28 14Concentration of part-time employment in low-wage employment (overall share = 100) head count 122 124 160 221 132 164 102 179 88 153 278 122 189 228fte 116 100 120 215 126 154 93 183 84 160 301 110 204 n.a.*) Low pay is defined as below two-thirds of median gross hourly earnings excluding payroll taxes and employer contributions. **) Employees only. Part-time jobs are all jobs of less than 35 hours per week; full-time jobs are defined as 35 hours or more. For calculations from ECHP and CPS see preceding table. Small part-time jobs < 15 hours a week; substantial part-time jobs 15–35 hours a week. No detail is available for small jobs in France but their overall employment share is tiny. Source: Salverda and Mayhew, 2009, Table 4.

The evolution of part-time work and low-wage employment in the Netherlands, where part-

time work has shown particularly strong growth, adds to the picture. Though the right to work


53 of 143

part-time at a pro rata reduction in pay has meant that part-time work in the Netherlands is not

more strongly associated with a pay disadvantage after controlling for gender and other

characteristics, this growth of part-time work may still exert a significant external effect on

the functioning of the low-skilled labour market. It is not so much that part-time jobs are low

paid but the opposite, increasingly low-wage jobs are part-time. Figure 2.3.3 indicates how

the incidence of low pay has grown among part-time jobs (17→27%) while remaining

virtually unchanged among full-time jobs (10%). Whilst at the same time full-time

employment stagnated, the share of part-time jobs in low-wage employment has soared, from

24% at the end of the 1970s to 70% in 2005.

Figure 2.3.3 Incidence of low pay* among part-time and full-time employees, the Netherlands, 1979–2008

5

10

15

20

25

30

1970 1975 1980 1985 1990 1995 2000 2005

All + 7%

Full-time + 0%

Part-time +10%

24%

70%

Source: Salverda, 2008, Figure 2.9

As a result, low-skilled labour supply faces increasing difficulties of finding the full-time jobs

needed for a proper income. This applies particularly to young workers and school-leavers

who face a youth labour market where most jobs offer low pay, temporary contracts and few

working hours – in contrast to the end of the 1970s when the full-time ratio among youth jobs

was above average and temporary contracts hardly existed. Similar experience of the potential

disadvantages of part-time work is emerging for Germany. But there the most pronounced


54 of 143

difference is between employment continuity, whether in full-or part-time work, and an

employment break, with the employment break being the major source of pay disadvantage.

Table 2.3.4 Individual probabilities of being low paid, selected variables, 1995–2001 AT BE DK FI FR DE GR IE IT NL PT ES UK US Female 0.505 0.437 0.186 0.350 0.458 0.474 0.360 0.239 0.194 0.430 0.364 0.371 0.412 0.456Part-time 0.019 0.055 0.055 0.101 -0.017 0.071 -0.096 0.136 -0.200 0.292 0.219 -0.085 0.170 0.130Source: See Table 2.1.1 for full detail.

Descriptives (Table 2.3.3) do indicate higher frequencies of low pay among part-time jobs,

especially among small part-time jobs of less than 15 hours per week. Similar to gender, these

figures do not necessarily mean that working part-time carries a pay penalty compared to full-

time as, again, part-time employment may be more concentrated in types of industries or

occupations that are generally low paid and occupants of part-time jobs may also be less

skilled or experienced.

The ECHP’s microdata enable controlling for such circumstances and unravelling the

effects of different factors. This has been done using the most up-to-date (five-probit)

approach to modelling transitions derived from Jenkins and Cappellari (2004). It accounts for

endogeneity of initial conditions, selection into employment and attrition of the ECHP

samples. The outcomes are shown in Table 2.3.4. In most cases the model estimates lead to

similar conclusions as the descriptives: women and part-time jobs have higher probabilities of

being low paid. Again the risk run by Danish women is clearly less than elsewhere, as the

0.186 coefficient is the lowest, followed by Italy.

One limitation is in the nature of the data. Increasingly, the firm or employer side of the

picture is found to be an important determinant of a worker’s pay as we have seen in the

previous section. Though the necessary linked employer-employee data are becoming

increasingly available, those enabling proper international comparison for low pay are still

lacking.

Karen Mumford and Peter Smith (2009) assess the role of individual and workplace

characteristics in accounting for the gender and full/part-time earnings gaps, using linked

employer-employee data from WERS2004 which relate to the UK. They find substantial

(raw) pay gaps everywhere, with the gender gap larger in part-time work (20%) than in full-


55 of 143

time work (14%), and the part-time gap worse for women (18%) than for men (12%). They

establish that occupational segregation, traditionally seen as a prime culprit for the gender

earnings gap, would give a female earnings premium for full-time work, where the gap is now

overwhelmingly ‘unexplained’ by personal and workplace characteristics. Occupational mix,

however, still accounts for 28% of the gender gap in part-time work, and over 40% of the

part-time pay gap for both women and men; part-time jobs are heavily concentrated in lower-

paying occupations. Workplace segregation is found to contribute significantly to the

full/part-time earnings gap for both males and females; part-time employees work in more

feminized workplaces and their earnings are lower.

Earnings mobility

Again, the perspective of individual careers of female employees may be different from the

static picture obtained so far. This dynamic aspect is spelled out for earnings mobility in

Table 2.3.5, which harks back to Table 2.2.3.

For women in a situation of low pay the chances of remaining there are usually above average

(read: men), except for Greece and Italy, as can be inferred from a comparison with

Table 2.3.1. However, in these two countries this occurs primarily because of higher chances

of exiting employment and not because of speedier moves up the earnings distribution.

Changes for women of remaining high paid are considerable, but they are always less than for

men, while the two complements – falling to low pay or leaving employment – are always

more frequent for women.

For part-time jobs the picture is slightly more diverse internationally. Remaining low paid as

a result of part-time employment is a more frequent occurrence in Belgium, the Netherlands,

Portugal, the UK and the US. In various countries – Austria, Finland, Greece and Spain – the

chances of moving up the earnings distribution are above average while in others they are

below. Exiting to non-employment is below average in Greece, Italy and Spain. In Greece,

Italy and the US, women with high-paid jobs have a better chance of remaining high paid.

Particularly in Greece they glide less often into low pay or non-employment.


56 of 143

Table 2.3.5 Annual transition chances into and out of low-pay and better-pay states, female and part-time employees, 1995–2001

AT BE DK FI FR DE GR IE IT NL PT ES UK US Women Low pay t–1 Remaining in low pay 0.616 0.525 0.503 0.397 0.505 0.615 0.523 0.535 0.458 0.623 0.617 0.418 0.605 0.568Escaping to better pay 0.222 0.276 0.264 0.264 0.289 0.220 0.244 0.239 0.329 0.216 0.241 0.282 0.231 0.354Leaving to non-employment 0.162 0.208 0.247 0.333 0.213 0.168 0.237 0.228 0.213 0.166 0.148 0.311 0.169 0.082Better pay t–1 Remaining in better pay 0.852 0.843 0.865 0.839 0.844 0.867 0.807 0.830 0.844 0.870 0.853 0.784 0.834 0.834Falling to low pay 0.059 0.062 0.036 0.047 0.055 0.048 0.067 0.059 0.038 0.060 0.046 0.065 0.083 0.100Leaving to non-employment 0.090 0.095 0.099 0.113 0.101 0.086 0.126 0.111 0.118 0.070 0.101 0.151 0.083 0.066Part-time jobs Low pay t–1 Remaining in low pay 0.571 0.541 0.479 0.347 0.492 0.591 0.477 0.531 0.444 0.636 0.623 0.406 0.626 0.556Escaping to better pay 0.254 0.248 0.236 0.297 0.227 0.228 0.308 0.229 0.394 0.202 0.203 0.309 0.196 0.360Leaving to non-employment 0.173 0.214 0.290 0.398 0.227 0.185 0.213 0.235 0.164 0.164 0.178 0.289 0.180 0.079Better pay t–1 Remaining in better pay 0.850 0.822 0.832 0.792 0.844 0.855 0.880 0.829 0.872 0.851 0.847 0.764 0.784 0.848Falling to low pay 0.059 0.078 0.053 0.065 0.054 0.051 0.035 0.062 0.024 0.071 0.054 0.083 0.122 0.098Leaving to non-employment 0.091 0.100 0.115 0.144 0.102 0.094 0.084 0.109 0.104 0.077 0.098 0.153 0.094 0.054See Table 2.1.1 for more details. Source: Salverda and Mayhew, Table 8, with extension for women and part-time jobs.

Part-time and low-pay spells and occupational choice in women’s careers

Detailed as the results may be, the above approach to earnings mobility is still of limited

value in several respects. First, because of the period covered, basically the second half of the

1990s. It witnessed a favourable evolution of (female) employment, and outcomes may differ

in a downturn. For lack of (EU-SILC) data for later years there is little we can do about this.

Secondly, transitions are year-on-year and do not allow taking a longer-term perspective.

Thirdly, the focus is earnings transitions in relation to characteristics in the preceding year;

transitions between the years in other respects – for example, and in particular here, with

regard to the working hours of the job – that may be occurring at the same time cannot be


57 of 143

accounted for. Here an internationally comparative approach is well-nigh impossible for lack

of proper data. Two important contributions help to remedy the second and third limitation.

They focus on the effect of spells of part-time and low-wage jobs respectively, using national

data over a longer time stretch, both from the United Kingdom. A third helpful contribution

looks at the choice of occupations by women in the light of long-term perspectives of

potential absence from employment, using German data.

Strong evidence has been brought to light that, at a time when improved educational

attainment and greater labour-market attachment are reducing the gender pay gap for women

in full-time work, the part-time pay gap is becoming a major, and increasing, dimension of the

gender pay differences. Not only are part-time jobs disadvantaged in terms of current pay, but

a spell of part-time work brings an on-going disadvantage through a lower future pay

trajectory, even after a return to full-time work. Evidently, this affects women far more than

proportionally. Switching between full-time and part-time jobs may have lasting effects. A

striking feature of this pay disadvantage is that professional women who are able to continue

in professional jobs on a part-time basis appear largely to avoid it. The disadvantage centres

on the lower-skilled. These are already the groups where ‘precarious’ employment is most

marked, involving the cycle between low-paid jobs and unemployment. An additional widely

documented dimension of these jobs is the low amount of training provided, further

reinforcing the low-skills trap and employment insecurity (see Section 2.4).

Analysis of the part-time pay penalty was carried further by Sara Connolly and Mary

Gregory (2009), building on earlier work (Connolly and Gregory, 2008) which was discussed

at the Warsaw workshop [W2]. Using 27 years from the New Earnings Survey Panel Dataset

they show that the wage return to work experience derived from part-time employment is low,

even negligible if it is gained in lower-level occupations. This is sufficient to account for the

standard finding of an ‘intercept’ penalty to part-time status. In addition, one-quarter of

women in high-skill jobs downgrade occupationally when they switch to part-time work, a

proportion which rises to 43% among those who also change employer. With this

combination of changes the switch to part-time work results in an immediate earnings drop of

32%. Their reversal, with a return to full-time work and upgrading of occupation, brings a

significant earnings gain, 13%, but recovering under half of the losses from the initial switch

to part-time work. The effects of part-time work on subsequent earnings trajectories are long-


58 of 143

lasting, and may be permanent. Simulations compare the earnings profile of a woman in

continuous full-time work in a high-skill occupation with the trajectory resulting from

switching into part-time work for six years followed by a return to full-time work. Switching

to part-time and downgrading to a medium or low-skill job, then reverting to full-time work in

the original high-skill occupation, restores the wage growth profile of the high-skill job but

from a much reduced level and permanently depressed by the low return to part-time work

experience. Five years after return to full-time work earnings are 20% below their original

trajectory. If the return to full-time work involves continuing in the lower-level occupation of

the part-time years the earnings trajectory is permanently lower and grows more slowly; after

five years back in full-time work the earnings gap has widened to 40%.

The second contribution elaborates on the effects of low-wage spells. It is widely

documented that the incidence of low pay is greater among women than men. Less well

documented, however, are the relative durations of spells in low pay, and the probabilities of a

‘good’ exit to a better-paying job as against to unemployment or inactivity. Euan Phimister

and Ioannis Theodossiou (2009) use the British Household Panel Survey to examine these

issues for the UK in a competing-risks framework, allowing for unobserved individual

heterogeneity. The UK offers particular insights in that the introduction of the National

Minimum Wage (NMW) in 1999, lifting the bottom end of the wage distribution, can be seen

in a gender context as complementary to equal pay policies. Low-paid women were the major

beneficiaries, comprising two-thirds of those whose pay was increased by the NMW.

Phimister and Theodossiou find that women’s spells in low-paid employment are, in general,

at least as long as men’s, whilst their probability of a ‘good’ exit to a better-pay job is

significantly lower. After the introduction of the NMW, shorter spells in low pay are observed

for both men and women, but accompanied by a decreased probability of a ‘good’ exit.

Educational attainment, the traditional route out of low pay, also brings shorter low-pay spells

and higher probability of exit to a better-paid job, although the NMW appears to have

dampened these effects. For women (as for men) low-pay spells in part-time work are shorter,

again more so after the introduction of the NMW; but this comes at the cost of a lower

probability of exit to a better-paid job and higher probability of exit to inactivity.

Finally, the rate of depreciation of human capital in different occupations during

employment breaks gives a financial incentive to occupational choice for women anticipating


59 of 143

family-related career interruptions. This leads to gender segregation in occupations.

Depreciation of human capital during non-employment is often hypothesized but rarely

measured, particularly across occupations. Dennis Goerlich and Andries de Grip (2009)

estimate depreciation rates for time spent on family-related breaks for six occupational groups

(male/female-dominated and integrated, each high- and low-skilled). Using GSOEP data they

find short-run depreciation rates that are significantly lower in female than in male high-skill

occupations, but no difference between female and male low-skill occupations. They interpret

this as supporting the hypothesis that higher-skilled women select occupations where

anticipated depreciation is lower, creating gender segregation in skilled jobs and ‘female’

occupations.

Motherhood, employment and pay

The movement of mothers, including those with young children, into paid employment

outside the home has been one of the defining economic and social developments of recent

decades. Further expansion is endorsed in the EU’s Lisbon targets for enhancing the

performance of the European economy, identifying low female participation as a major source

of the US–EU employment gap. But this development brings its challenges. Women still

provide most of the care for children (and other dependants) often curtailing or reorientating

their labour-market participation in order to do so. The reconciliation of work and family has

therefore become a major new focus for social policies towards gender equality. At the same

time employers have been expanding part-time jobs, and beginning to introduce other ‘family-

friendly’ developments at the workplace, matching mothers’ needs.

Currently the major social policy response to the competing claims of employment and

caring is the extension of maternity leave. Under EU Directive all member states now provide

a minimum of 14 weeks of maternity leave, with job protection and, typically, full income

replacement. The beneficial effects of this, for mother and child, are accepted as

incontrovertible. In addition, all countries now provide a further period of job-protected leave,

varying from a minimum of three months up to three years, often unpaid, sometimes with

partial income replacement. While many countries make this leave formally transferable

between parents, in practice it is overwhelmingly taken by mothers. Assessing the social

efficiency of parental leave is not straightforward. Supporters claim that by allowing mothers


60 of 143

a job-protected break for childcare it obviates potential withdrawal from the labour force,

while its statutory basis gives women improved status. But any employment interruption

implies forgone work experience. In addition, human capital may depreciate, as skills, or

confidence in them, atrophy through lack of use or become obsolete with, for example,

developments in software or office technology. These losses will increase with the length of

the non-employment spell. Where job protection results in the mother returning to her

previous employer, firm-specific human capital is retained. But a longer maternity break may

be viewed as a signal of lower work commitment, inhibiting selection into training and career

advancement.

The market, however, has also responded, notably through the expansion of part-time

employment opportunities, which are predominantly taken up by women. The expanded

availability of part-time employment opportunities is targeted by the EU as one of the major

routes through which increased female participation will be achieved. Prima facie, by

allowing women to maintain labour-market participation, even on a reduced scale, part-time

employment should moderate the losses in human capital attributable to maternity breaks.

However, as the EU acknowledges with its caveat that the expansion of part-time work should

be in ‘good quality’ jobs, part-time work tends to be concentrated in occupations which

provide low pay, little training and few opportunities for career advancement. While women

may choose to put their careers temporarily on hold for childcare, the adverse implications for

their human capital may be permanent. Part-time work again obtrudes the question how far, or

on what terms, this mode of reconciling work and family supports women’s labour-market

position.

Women adapt their labour-market behaviour to domestic requirements in a range of

further ways, some of which in turn shape labour-market outcomes. They have the incentive

to select into occupations or jobs with more family-friendly conditions, such as flexibility in

work hours or limited travel time. These decisions will lead to gender segregation. Viewed in

terms of compensating advantages, or costs to employers, these jobs may offer lower

earnings. Then gender segregation is also marked by a gender pay disadvantage. Moreover,

women may respond to the anticipated depreciation of their human capital due to motherhood

breaks by tailoring their educational choices and selecting occupations where this perceived

risk is lower. This again will contribute to gender segregation. Lower human-capital


61 of 143

depreciation may be reflected in a lower wage profile within the occupation, again associating

occupational segregation with pay disadvantage. For women balancing work and family there

are many channels through which the trade-offs involved may bring penalties in the labour

market. With the adjustment costs of changing occupation or even employer these penalties

may be long-lasting.

Two contributions assessing the wage implications of motherhood, the ‘motherhood pay gap’,

and both relating to Germany, offer particularly relevant experience. The duration of leave for

childcare is the longest in the EU, up to 36 months beyond the statutory maternity period,

two-thirds of it with (means-tested) income replacement, and with the right to return to a

similarly graded (‘status-adequate’) job with the previous employer. The leave entitlement is

virtually universally taken by mothers. Publicly provided childcare is available for only

around 9 in 100 children under the age of three, against over 50 in Denmark, and an EU target

of 33. This combination of exceptionally generous leave with the scarcity of childcare places

gives a strong incentive for German mothers to leave employment and provide an extended

period of childcare at home, exposing the tension for mothers between maternity provisions

and their future labour-market potential. In principle the motherhood pay gap is measured as

the difference between mothers’ actual earnings and what these would have been had

childbearing not occurred. To represent the unobservable counterfactual two methods are now

to the fore. The first is based on matching, where individuals in the treatment group (mothers)

are paired with a control group of non-mothers, matched as closely as possible on key

relevant characteristics. The difference between the earnings of the mothers and the matched

group of non-mothers gives the estimate of the motherhood gap. The alternative method aims

to achieve a like-for-like comparison by controlling econometrically for as many sources of

variability as possible in the determinants of earnings, including motherhood status. The two

contributions apply these different techniques.

Miriam Beblo, Stefan Bender and Elke Wolf (2009) adopt a matching approach,

comparing the wages of mothers after return to work with those of otherwise comparable

female colleagues who have not taken maternity leave. Using administrative data from the

IAB their treatment group is mothers interrupting employment for the birth of a first child and

then returning to full-time work in the same establishment i.e. mothers with strong labour


62 of 143

force attachment. Applying propensity score matching based on information two years before

the birth they establish two control groups: non-mothers with similar personal characteristics

who remain in continuous employment in the same establishment (‘monozygotic twin

colleagues’), and a much wider control group of non-mothers with comparable characteristics

from all establishments (‘dizygotic twin colleagues’). The double control sample allows

investigation of the establishment effect, how far women intending to have a child select

lower-wage employers (implicitly on the basis of other job advantages). For the monozygotic

comparison the motherhood pay penalty one year after the employment break is estimated as

19%. The main source of the penalty is that while non-mothers experience continuing wage

growth, mothers not only fail to share in this but experience a small wage reduction on return

to the status-adequate job. The size of the penalty rises with the duration of the employment

interruption, exceeding 30% for a three-year break. Significantly, the penalty is lower for

more educated women, possibly indicating a stronger role for firm-specific human capital in

the jobs they hold and the advantage to the employer of restoring the job-match. Dizygotic

matching of the same mothers without firm-specific effects gives an estimated wage penalty

of 26% one year after return, indicating that mothers tend to select into firms where the wage

penalty to interruptions is lower. Since these are women with strong labour-market attachment

the authors interpret their estimates as a lower bound to the motherhood penalty.

Bianca Buligescu, Denis de Crombrugghe, Gülçin Menteşoğlu and Raymond Montizaan

(2009) use a wage equation framework and GSOEP. Significant innovations of this approach

are the modelling of participation as actual hours worked in a tobit specification, and the use

of recently developed estimation techniques to control in this non-linear formulation for

sample selectivity, unobserved heterogeneity and the endogeneity of working hours to wages.

Their preferred estimates give a wage penalty to maternity leave of 10–14% in the first year

of return to work. This wage penalty shows an intriguing time profile. For leave taken 2–3

years earlier it becomes virtually non-existent, suggesting swift and full recovery; but it shows

a resurgence four years after its commencement, which the authors interpret as an adverse

signalling effect involving those mothers who chose to take the maximum leave period

available. Tellingly, they find that the wage penalty for employment interruptions for other

reasons does not show the same diminishing pattern as maternity leave.


63 of 143

The estimated wage penalties in these two contributions differ conceptually but can be

matched numerically. The matching approach of Beblo et al. measures the difference in wage

outcomes for mothers returning to work against non-mothers. Their estimate of 26% for an

average break of 18 months, equivalent to 17% for one year, combines the short-term adverse

signalling effect of the employment break with the impact of the forgone work experience.

Buligescu et al. measure the impact on the wage of having taken maternity leave, conditional

on work experience; the wage cost of a year’s lost work experience, around 4%, raises their

estimated one-year penalty to 14–18%.

Fertility and employment participation

With the availability of cheap and reliable contraception, fertility control through the number

and timing of births offers a further route by which women can balance work and family. In

the 1970s and 1980s the pattern of responses was clear; fertility fell widely, to well below

replacement level, as increasing employment opportunities and earnings raised the

opportunity cost of children; those countries where women’s labour-market participation was

highest were also those where fertility was lowest. But more recent years have seen a reversal

of this pattern, with the high-wage, high-participation economies of Scandinavia showing

some of the highest fertility rates in the EU, while the countries of Southern Europe, notably

Italy and Spain, are characterized by low participation and low fertility. While fertility and

women’s labour-market participation are clearly still strongly interconnected, the nature of the

relationship between them is now much less clear. Two contributions address decisions on

fertility itself and on the use of non-parental childcare which are intertwined with ‘work and

family’.

With fertility control now giving women the opportunity of planning childbirth and career

jointly, the question arises of the relationship between fertility and labour-market

participation, and the potential influence of social policies on this. Daniela Del Boca, Silvia

Pasqua and Chiara Pronzato (2009) model childbearing and labour-market participation as

joint decisions in a dynamic programming framework, where current choices influence future

family size and accumulated work experience. The model is estimated on a set of seven EU

countries characterized by a range of labour-market features and social policies. The main

finding is that fertility is scarcely affected by part-time employment opportunities, the


64 of 143

availability of childcare, parental leave, or family allowances. Participation, on the other hand,

varies with the availability of part-time jobs, but only ‘good quality’ jobs, and childcare; for

women with lower educational attainment, family allowances and the extent of optional

parental leave are also important. Across the EU the labour-market and social policy context

influences mothers’ labour supply, but childbearing appears to be a separate decision.

Katja Coneus, Kathrin Goeggel and Grit Muehler (2009) examine the choice by German

mothers on the use of institutional childcare. Emphasising the simultaneity of this decision

with labour-market participation, their innovation is to instrument participation by the

mother’s previous working hours, as a correlate of her commitment both to her own

employment and to the advantages for child development of the socialisation of attendance at

kindergarten. They find that instrumenting mothers’ current employment substantially

increases its estimated effect on the probability of using institutional childcare, indicating

downward bias in the many estimates which do not allow for simultaneity.

2.4 Training, age and immigrants

The third set of LoWER research interests covers a variety of issues related to training and

education, which ranges from overeducation, training of immigrants and of low-skilled

workers, and lifelong learning and the skills of older workers, to the competitive supply of

low-wage labour by students. Increasing worries about the current and future labour-market

position of the least educated segment of the population have provided important motivation

for the work of the LoWER network from its very inception in 1995, and explain the title of

the third phase of network activities. Educational attainment is an extremely important

determinant of an individual’s pay and earnings career (or non-career), and also of the training

that is provided, or not, over a person’s working life.

On these, in many ways interlinked, aspects of low-wage employment the LoWER3

network has organized various meetings during the third phase reported here. The first Annual

Conference [C1, Mannheim, 2005] paid special attention to training and skills, the 2007

Annual Conference [C3, London] focused on immigration, and the special workshop [W4,

Berlin, 2008] dealt with job insecurity and training. Taken together with various individual


65 of 143

presentations made at other LoWER3 events, notably including the Inequality conference

[C5, Seville, 2007] that provided the basis for the Oxford Handbook, more than 60

contributions in total have been made in the field. The direct results have been published as a

coherent set of eight articles in the special issue “Training and Job Insecurity” of the journal

LABOUR, Review of Labour Economics and Industrial Relations in February 2009 edited by

the LoWER members who took responsibility for organising the last workshop, Thomas

Zwick, Antje Mertens and Wiemer Salverda. In addition, several chapters of the Oxford

Handbook deal with issues of education and migration.

The section deals with educational attainment and employment subsequently focusing on

working part-time, low pay and earnings mobility in relation to skills, training for the low

skilled and those in insecure jobs, the role of training and low pay for young and older

workers, and skills, pay and assimilation of immigrants.

Educational attainment, employment and part-time hours

Figure 2.4.1 pictures the often significantly lower levels of employment participation of the

less-skilled population, defined as those who have not obtained a diploma in higher secondary

education (ISCED levels 0–2), compared to those with the highest skills (ISCED 5–6). For the

low skilled very large differences across countries occur. Extremely low levels in Slovakia

and Czechia, with employment rates of 15% and 24% respectively, are followed by those of

several other new member states at around 30%: Hungary, Lithuania, Poland and Bulgaria.

By contrast, the highest levels, above 70%, are found in Portugal, Spain, Greece, the

Netherlands and Denmark. At the same time the rates of the high skilled are virtually identical

internationally as indicated by the combined height of the stacked columns in the graph.

Subsequently, the gaps between the two skill groups (the light part of the bars) vary

enormously, the maximum gap being 58 percentage-points (Lithuania) and the standard

deviation of the gaps across 25 EU countries 16.2, which contrasts with 10 percentage-points

and 2.8 respectively for the high skilled only (compare to Table 2.3.1). For old EU15 the

differences are half as large in terms of standard deviation. On average, the low skilled rates

in EU15 hardly changed since 1995 while the gap to the high skilled grew – but the behind

average is significant growth and a declining gap in some countries (e.g. Spain, Ireland,

Netherlands, Portugal) and the opposite in other countries (France, Germany, Sweden, UK).


66 of 143

Figure 2.4.1 Employment-population rate of low-skilled population and difference to the high skilled, Men, 2007

5950

3524

50

70

39

7362 58

49 53

70

32

61 62

31

5947

72

31

73

4758

49

15

66

3137

5266

39

20

52

1525 29

38 29

17

54

29 22

58

2842

18

56

14

4030

40

74

23

0

10

20

30

40

50

60

70

80

90

100

AT

BE

BG CZ

DE

DK EE ES

EU15

EU27 FI FR GR

HU IE IT LT LU LV NL PL PT RO SE SI SK UK

Gap to high skilled

Low skilled

Source: Calculated from European Labour Force Survey Figure 2.4.2 Unemployment-population rate low skilled and difference to high skilled,

Men 15–64, 2007 (ELFS)

23

2 23 3 2

4 3 3 35 4

2 2 32 2

4

2

3

5

24

2 3 3

4

34 5

8

13

2 3 3 4

3

53

1

1

1

2

2

20

3

4

2

11

6

0

5

10

15

AT

BE

BG CZ

DE

DK EE ES

EU15

EU27 FI FR GR


Low skilled (top up)

High skilled


These outcomes focus on males but they can be related to the preceding treatment of women

where Figure 2.3.2 indicated female employment by skills relative to men. Also high-skilled


67 of 143

women show relatively small international differences, albeit somewhat larger than for men,

while also among women the low skilled vary significantly across countries though slightly

less for (prime-age) women than for men.

Figure 2.4.2 indicates the often higher levels of unemployment with the help of

unemployment-to-population rates5. They are always higher for the low skilled – actually,

twice as high on average with a gap of 3.2 percentage-points. They are strikingly higher for

Slovakia and Germany. For women the picture is more diverse as in various countries –

notably Greece – the unemployment-population rate is lower for the low-skilled than for the

high-skilled6.

The preceding section discussed the importance of part-time work for low pay. Here we

can see that there is also a substantial overlap between working part-time and lower levels of

educational attainment. Figure 2.4.3 shows that low-skilled women are virtually always faced

with higher rates of part-time work compared to high-skilled women and also with often very

much higher part-time rates than their less-skilled male counterparts.

Figure 2.4.3 Part-time shares in employment: low-skilled women versus high-skilled women and low-skilled men, 2007

6

23

3 2

13

19

1413

14

21

13

8

5

28

14 15

24

10

19 20

11

1513

8

20

33

2

6

35

2426

32

29

17

30

12

4

35

28

3

7

1013

1

32

5

4144

0

5

10

15

20

25

30

35

40

45

AT

BE

BG CZ

DE

DK EE ES

EU15

EU27 FI FR GR


Gap to high-skilled womenGap to low-skilled men

55

Source: Calculated from European Labour Force Survey 5 These are a better indicator of unemployment as a social problem for the population than the common unemployment-over-labour-force rates. 6 It may point to a different labour-market significance of declaring oneself unemployed.


68 of 143

Low pay, earnings mobility and skills

In the same vein as Table 2.3.2 for women and part-time hours, Table 2.4.1 provides a picture

of the low-wage employment along four dimensions which are of interest for the present

section: educational attainment, nationality, age and the permanent or temporary nature of the

labour contract. Each is presented here separately though they often overlap with the other

three dimensions. The low skilled have very high frequencies relative to the high skilled. This

is notably the case in Denmark, where the few low skilled are very often low paid – a

phenomenon shared with other countries where also the low skilled are few – , but equally in

Portugal, where, by contrast, the high skilled are few and seldom low paid.

Table 2.4.1 Low pay* by skills, nationality, age and contract, employees aged 15–64, 2001

AT BE DK FI FR DE GR IE IT NL PT ES UK USAll 13 13 12 10 15 23 18 20 10 23 11 18 22 24Low skilled Incidence 34 22 38 18 19 47 27 31 14 48 14 26 33 60Concentration (all=100) 261 177 325 172 120 204 151 158 139 213 127 143 151 254 ratio to high skilled 9.1 4.8 22.4 6.2 2.4 4.7 4.1 7.4 4.1 4.3 14.4 3.0 2.6 9.4Non-EU nationals** Incidence 34 50 36 13 23 25 40 99 7 33 38 19Concentration (all=100) 257 396 303 124 148 107 226 510 69 146 206 88 ratio to national 2.7 4.0 3.1 1.2 1.5 1.1 2.3 5.1 0.7 1.5 2.1 0.9Young workers (15–24) Incidence 42 29 62 41 57 70 59 36 35 75 19 40 49 56Concentration (all=100) 316 235 530 395 367 301 330 186 346 331 171 220 223 239 ratio to 25–49 12.0 3.1 17.0 6.7 6.7 6.5 5.1 3.1 4.6 7.9 4.0 3.6 6.9 Older workers (50–64) Incidence 8 7 4 8 10 18 12 17 5 10 13 13 22Concentration (all=100) 62 53 35 76 63 79 67 86 54 46 120 69 102 ratio to 25–49 2.3 0.7 1.1 1.3 1.1 1.7 1.0 1.4 0.7 1.1 2.8 1.1 3.1Temporary contracts Incidence 31 25 44 27 48 39 39 43 32 46 19 33 35Concentration (all=100) 232 196 370 263 311 170 221 219 317 202 174 181 161 ratio to permanent 2.7 2.4 6.5 3.6 4.0 2.3 3.6 3.2 4.6 3.2 2.2 3.2 1.9*) Low pay defined as below a threshold of two-thirds of the median hourly wage. **) Including nationality unknown. Source: Calculations from ECHP and CPS (courtesy John Schmitt at CEPR Washington). Note that, in contrast to most other outcomes based on ECHP, employees working less than 15 hours have been included here, using the variable PE005 (not available for France where small jobs are trivial in number).


69 of 143

The immigrant population, which for lack of further detail is defined as non-EU-nationals7, is

also more often found in low-wage jobs. Note though that this category may include well-paid

workers from other developed countries – this may explain the superior position of foreign

employees in the UK where many may be working in the City.

The age dimension is shown with the help of a comparison of young and older workers

respectively to prime-age men. Low pay appears to be an extremely frequent condition among

workers up to the age of 24 years in countries such as the Netherlands, Denmark and

Germany where 60 to 75% of them have jobs which are low paid but also in France, Greece

and the USA with more than 50% in this position. This contrasts with older workers who

generally do better than the national average but do lag somewhat behind prime-age males.

Compared to other countries they are particularly worse off in Portugal and the UK.

Low pay is also a frequent condition for persons employed on temporary contracts.

Clearly, these unidimensional descriptives need to be controlled for their overlapping effects.

Table 2.4.2 highlights the results for the relevant variables from earlier Table 2.2.1 that

reported individual probabilities of low pay. Both lower skills and young age appear to be

important across the board though effects differ substantially between countries. Implied by

the strong negative outcomes for higher levels of education, low skills appear to be a

particularly important determinant of higher low-pay frequencies in Denmark, Finland,

Germany, the Netherlands and the US. Their effects, though certainly significant, are more

modest – and found in a relatively narrow range – in the other countries. The age dimension is

important for, again, Denmark, Finland, and the Netherlands, but less for Germany and the

US. In most countries effects of older age, 45 to 64, are close to, or even more favourable,

prime age.

Temporary contracts show a mixed picture but can be important as for example in the

Netherlands. Unfortunately, the nationality variable was of insufficient quality and quantity to

incorporate. The table also shows that employees’ occupations make a contribution over and

above the level of educational attainment, age or contract. Predictably, service, craft, plant 7 For the US defined as foreign born. It is important to take realise that ‘foreign-born’ is a broader definition than foreign nationality as a proportion of immigrants may become nationals of the host country. The population share of the former is twice that of the latter for the United States (12.8 against 6.6%) , more so than in the five European countries on average: 9.9 against 5.7%). However, at half the level of 19%, the US immigrant share of low pay would still top all European countries. See OECD, International Migration Outlook 2006, Chart I.4.


70 of 143

and elementary workers are more often low paid, often to an amazingly similar extent in

different countries.

Table 2.4.2 Individual probabilities of being low paid, selected variables, 1995–2001 AT BE DK FI FR DE GR IE IT NL PT ES UK US Age ≥30 & <45 yrs -0.371 -0.403 -0.633 -0.788 -0.552 -0.309 -0.522 -0.413 -0.412 -0.597 -0.217 -0.381 -0.313 -0.250≥45 & <65 yrs -0.167 -0.286 -0.728 -0.801 -0.422 -0.004 -0.550 -0.427 -0.545 -0.346 -0.234 -0.467 -0.186 -0.329Education Secondary -0.272 -0.185 -0.433 -0.346 -0.090 -0.363 -0.095 -0.160 -0.115 -0.426 -0.201 -0.206 -0.244 -0.342Tertiary -0.276 -0.577 -0.712 -0.636 -0.389 -0.661 -0.238 -0.334 -0.125 -0.857 -0.396 -0.383 -0.320 -0.629Contract Temporary contract 0.128 0.150 0.041 0.226 0.348 0.005 0.265 0.207 0.282 0.334 0.256 0.251 0.169 n.a. Occupation Legislators, senior officials and managers. -0.072 -0.456 -0.076 -0.205 -0.090 -0.042 -0.080 -0.075 -0.032 -0.076 0.178 -0.201 -0.186 -0.181Professionals -0.068 -0.327 -0.171 -0.569 -0.267 -0.134 -0.079 -0.290 0.011 -0.168 -0.061 -0.235 -0.356 -0.166Technicians and associate professionals. -0.018 -0.075 -0.074 -0.031 -0.114 -0.011 0.038 -0.179 0.017 -0.174 -0.078 -0.031 -0.180 -0.049Service workers shop/market sales workers 0.309 0.378 0.461 0.258 0.455 0.302 0.166 0.311 0.286 0.311 0.381 0.279 0.529 0.319Craft and related trade workers 0.199 0.362 0.247 0.239 0.246 0.234 0.270 0.219 0.310 0.155 0.370 0.197 0.211 0.202Plant and machine operators and assemblers 0.260 0.344 0.266 0.363 0.342 0.156 0.119 0.149 0.166 0.285 0.159 0.178 0.494 0.045Elementary occupations 0.407 0.420 0.403 0.579 0.527 0.304 0.311 0.285 0.413 0.386 0.401 0.306 0.620 See Table 2.1.1 for full detail.

The probabilities of low pay should not be interpreted as evidence that the low skilled are

always low paid while the high skilled never are. We can now add from microdata to the

macro evidence presented in Section 2.1. Low-wage employment and less-skilled workers are

no identical sets. First, not all low-skilled workers are low paid. As shown in Table 2.4.1 the

low paid are always a minority among the low skilled, with the exception of the USA where

60% are low paid. Nonetheless, the two categories may be increasingly overlapping as the

rapid increase in educational attainment plausibly implies a process of sorting that sifts out the

more talented to continue to higher levels out and augments the share of the less talented who

remain among the low skilled. Secondly, much of low pay is received by workers with a


71 of 143

better education and the low skilled tend to become even a minority among the low paid, as in

Belgium, Finland, Greece, the Netherlands and the USA (Figure 2.4.4). In that sense there is a

clear perspective of overeducation in low-wage jobs (Borghans & De Grip, 2000 and Sloane,

2003). Important international differences remain though with clear majorities of the low

skilled in Portugal, France, Spain and Denmark. It seems that countries with higher

educational attainment tend to have larger shares of better educated on low pay.

Figure 2.4.4 Low-wage employment by level of education of employees, 2001

4637

56

29

68

37 4252 54

9

87

61

46

28

51

47

40

60

16

52 47

44 42

75

12

21

25

28

3

16

410

1610 11

4 4

16

1

1829

28

0%

20%

40%

60%

80%

100%

AT BE DK FI FR DE GR IE IT NL PT ES UK US

High

Medium

Low

Source: see Table 2.4.1.

Training, the low skilled and job insecurity

For labour-market analysis we need to take as given that part of the population leave the

school system with low qualifications. As Machin (2009) states in the chapter on education of

the Oxford Handbook that it “is very clear from the evidence in this area (...) that education

has been becoming more important for labour-market outcomes and that those left behind

with low levels of educational attainment are penalized more heavily in the modern labour

market.” All of these show that education and inequality are closely linked not only in the

output of the school system but also through returns to education once employed and the

broader effects of supply and demand of the less educated the and better educated in the


72 of 143

inequality of wages. Unsurprisingly, the training of employees seems to be a very suitable

way to get out of the poverty trap, improve the job position or get a better job.

However, we observe that the incidence and intensity of training declines rapidly when

employees have lower qualifications and/or earn less (Shields, 1998). A recent analysis by De

Grip and Wolbers (2002) shows that this holds for the various member states of the European

Union. The decision whether an employee participates in training is determined by the

employer by comparing costs and benefits. On the one hand, the costs of training may be

higher for less-qualified employees, because they may have greater barriers to learning or

they may require basic skills that are difficult to teach in the framework of continuous training

of adults. We observe, for example, that firms provide less training to those employees who

need training in basic skills such as mathematics or the native language than to those with

specific training needs (Kuckulenz and Zwick, 2003). In addition, the benefits of training less-

qualified employees may be lower than for higher qualified employees, because, for example,

increases in productivity may be limited. The (productivity) effects of training and new work

places have been the main focus of analysis while the selection of workers participating in

these programmes is a neglected issue in spite of the fact that the decisions of firms about

participation in training clearly affect employment and earnings prospects.

Training and low pay

In an international comparison for Denmark, the Netherlands, Italy, and Spain, Blázquez and

Salverda (2009) demonstrate that on-the-job training (and high levels of general education)

reduces the risk of being in a low-paid job or not employed. At the same time on-the-job

training increases the probability of escaping from low-paid employment to better paid jobs.

In Italy and Spain significantly lower shares of employees receive employer-provided training

and therefore (self)selection is more pronounced than in Denmark and the Netherlands. One

consequence of this is that continuing training has a stronger positive effect in the latter two

countries where on-the-job training is so widespread that instead of helping workers to

advance they also may need it for staying where they are. It seems to confirm that in countries

where firm internal labour markets dominate the training participation of low-skilled workers

appears to be higher than in countries where craft markets are more prominent.


73 of 143

Pavlopoulos, Muffels and Vermunt (2009) also look at the impact of training on low-pay

mobility in the UK and the Netherlands. Interestingly, they find that training incidence in a

highly regulated labour market such as in the Netherlands is not higher than in a deregulated

labour market such as in the UK. The key to this finding is that training measures in the

Netherlands tend to be longer and more expensive than training measures in the UK.

According to expectations they show that training increases the chances to jump over the low-

pay threshold and reduces the risk to fall under this threshold. For the UK they find that job-

related and firm-specific training rather than general training increase the likelihood of

escaping low pay. However, only workers with intermediate and higher education seem to

profit from training. Therefore, training appears to be unable to increase the lower skilled

workers’ chances of upward wage mobility.

Nelen and De Grip (2009) report a similar phenomenon for part-time workers who do not

benefit from human resource practices such as performance interviews, personal development

plans, and feedback, which can be interpreted as investments in human capital. They show

that full-time workers' training participation is primarily driven by these resource measures or,

more generally, by firm characteristics. Part-time workers' training incidence, however, can to

a large extent be explained by individual characteristics such as their learning motivation and

expectations they have of their individual future development. As a result part-time workers

self-select into training rather than being selected. The issue of self-selection is important not

only in this but also in a number of other studies.

Training and job insecurity

The labour-market experience of low-skilled employees is increasingly characterized by

frequent job changes that often go together with unemployment spells between two

employment spells. A broad range of scientific contributions deals with the question of how

to alleviate the plight of job insecurity. They specifically highlight self-selection issues on

both sides of the labour market and specify the type of training that is helpful for low-wage

earners. Moreover, the effects of human resource measures such as typical performance

interviews but also job-security guarantees are considered here. Finally, the macro-economy

may affect both the insecurity and the provision of training.


74 of 143

Human resource management that indirectly affects enterprise performance is at the centre

of the contribution by Bryson, Cappellari, and Lucifora (2009). They find that although job

security guarantees by the firm are associated with an increased probability of workforce

reductions, they do indeed increase workers’ perceptions of job insecurity in Britain. One

reason is that compulsory redundancies are less likely when there is a guarantee of job

security. As employers do not get short-run direct effects from the job-security guarantee

through for example an increase in work intensity, these guarantees – such as some training

measures – appear to be granted as part of a gift exchange to get a higher work motivation,

job satisfaction, trust and co-operation in times of substantial organisational change.

Jones, Jones, Latreille, and Sloane (2009) discuss an additional motivation to providing

training that is frequently overlooked. On the basis of British data they find that training is

positively associated with job satisfaction. Job satisfaction in turn is positively associated with

enterprise performance. Yet, a direct impact of training on enterprise performance is only

found for relatively long training measures and if the share of employees participating in

training is high. Hence, the principal goal of training might frequently be the improvement of

work motivation rather than the acquisition of human capital.

Figure 2.4.5 Employment-population rates low skilled by age, 2007

0

20

40

60

80

100

AT

BE

BG CZ

DE

DK EE ES

EU15

EU27 FI FR GR


Youth Prime age Older



75 of 143

Finally, analysing the unprecedented employment boom in Ireland in the second half of the

1990s, McGuiness, McGinnity and O´Connell (2009) consider the role of the macroeconomic

situation and demonstrate that, contrary to the frequently heard argument that boom phases go

hand in hand with higher wage inequality, wage inequality even decreased in Ireland. One

reason for this finding is the relative change in demand for and supply of different

qualification levels. The returns to education were stable and wage inequality was even falling

for men because there was a particularly strong increase in demand for unskilled labour. For

women, the wage premium for a university degree and the level of wage inequality fell

because the supply of highly qualified women increased more strongly than demand. This

means that the topical relative qualification supply and demand are key for the explanation

where somebody ends up at the labour market.

Age, training and low pay

At both ends of the age distribution of the working-age population – youth and older workers,

defined as ages 15–24 and 50–64 respectively – the employment rate of the low skilled is

much below prime age (Figure 2.4.5), with, on average, very little difference between EU15

and EU27. However, very different mechanisms as to education and training seem to be at

work here. We discuss the two age groups subsequently.

Youth

For youth we focus on the total while for them there is very little difference by gender. Figure

2.4.6 pictures the position of young employees vis-à-vis low pay and working hours, which

turn out to show important interaction. Better-paid youth employment rates are found within a

relatively narrow band in many countries: 23–32%. On the low-pay side, Germany, Denmark

and Austria have high shares of full-time employment, which seems to reflect the role of

vocational training in firms. Countries with high employment rates for youth (Netherlands,

Denmark and the USA) do so particularly through very significant amounts of low-wage part-

time jobs. More than half of young employees in the Netherlands are in this category. In this

there is an important role for small jobs, of less than 15 hours per week. This brings us to the

role of students, or in other words the overlap between participation in education and in the


76 of 143

labour market. In certain countries (Belgium, France, Greece, Italy, Portugal and Spain) not

all youth are either working or following an education. In the other countries the two overlap

but the extent to which varies substantially. A minimum level of overlap can be inferred from

Figure 2.4.7 that pictures the employment rate on the one hand and the rate of educational

participation on the other. The overlap must be especially large in Denmark and the

Netherlands, where about two-thirds of young people have a job and follow and education and

the minimum overlap must be about one third. Since 1998 several countries have been

moving closer to the Danish and Dutch situation which is no surprise as educational

participation is generally growing. In the remaining countries the potential overlap seems very

modest.

Figure 2.4.6 Youth employee-employment-population rates, low pay and working hours, 2001

29

19 2327

12 148

29

14 17

32

1923 25

20

228

15

25

10

11

16

7

11

1413

6

74 15

4

11

3 5 2

20

4

18

0

25

50

75


Low-paid part-time <15h.

Low-paid part-time 15-35*

Low-paid full-time

Better paid

*) For USA including less than 15 hours. Source: See Table 2.1.4.

Students have become an increasingly significant component of labour supply across Europe

as their numbers have increased, particularly due to increases in enrolment rates per head of

population. From the employment perspective student labour on a part-time or casual basis

may be particularly important in certain types of employment such as restaurants, retail trade

and tourist-related activities where there are peak loads or seasonal demands. Of particular


77 of 143

concern is the extent to which student employment may crowd out the employment of

unskilled workers, who may lack basic skills. Students may have an advantage not only in

being able to apply some of the transferable skills obtained through their educational

programmes, but also social skills which are particularly important in certain segments of the

service sector. Further, they may be prepared to price themselves into jobs which enable them

to combine study and work to an extent that affects unskilled workers’ competitiveness in the

labour market.

Figure 2.4.7 Youth rates of employment and educational participation, % of young population, 2006

54

25

66

3325

45

28

43

25

60

43

27

56

5258

66 68 6456 55

47

6252

5750

65

AT BE DK FI FR DE GR IE IT NL PT ES UK

Educational participation

Employment rate

Source: Eurostat, Labour Force Survey and Students by ISCED level, age and sex.

This competitive effect may include the adaptation to working part-time which may be well-

nigh impossible for low-skilled labour supply that would depend on full-time incomes. That

may be strengthened by progressive income taxation which, being normally based on annual

earnings, will be to the advantage of part-time incomes but also by the student-grant system.

In particular, the Netherlands and Denmark provide universal grants (Westergård-Nielsen,

2008, 66 ff; Salverda, 2008, 92 ff). These provide the students simultaneously with an

advantage when competing in the (low-wage) labour market with other labour supply, and the

need to look for additional income as the grant on its own is insufficient to live on. Both


78 of 143

countries allow generous franchises of income from paid labour that leave the grant

untouched. Similarly, in the UK the reduction of student state-maintenance payments

(through the erosion of the value of the student grant), reduced access to state benefits of

students, particularly the gradual replacement of student grants by loans and the introduction

of fees has encouraged more students to engage in paid employment, so that almost half of

university students are estimated to also be employed (Mason et al., 2008, 66 ff).

Finally, regarding the effects schooling of youths may have on their careers Bertschy,

Cattaneo and Wolter (2009) show that the reading skills of 15 year olds in the PISA

assessment has a strong impact on the type of occupation chosen. The type of vocational

training pursued at upper-secondary level, however, is decisive for a successful transition

from school to job – with more intellectually demanding vocational training leading to a

smoother labour-market entry and less inadequate employment. Still, a direct impact of the

PISA scores on the labour-market transition could not be measured. So obviously, the self-

selection into occupations (or in the case of Nelen and de Grip (2009), into part-time

employment) is more decisive for the workers’ later labour-market situation than differences

in the (training) behaviour of the employer alone.

Older workers

Contrary to youths, older workers – even the low skilled – in many countries have registered

an increase in their employment rates since the mid-1990s while those of youths often fell

(Figure 2.4.8). Though the increase may be surprising, it illustrates at the same time the

ageing of the work force. It implies that the experience and outcomes for older workers are

likely to have an increasing influence on the performance of the labour force as a whole, and

underlines the need to maintain the employability of older workers who wish to stay on in

employment or who cannot afford early retirement because of inadequate pension

arrangements.

Older workers also show, again contrary to youths, significant differences between men

and women – the growth for women in most cases being often substantially larger than for

men and, in spite of that, the female employment rate still being systematically lower with the

notable exception of the UK (Figure 2.4.9).


79 of 143

Figure 2.4.8 Employment rates of low-skilled younger and older workers, changes 1995–2007

-10

-5

0

5

10

15

20

AT BE DE DK ES FI FR GR IE IT NL PT UK

Young Older men Older women

Source: European Labour Force Survey. Figure 2.4.9 Employment rates of older workers by gender, 2007

0

20

40

60

80

100

AT BE DE DK ES FI FR GR IE IT NL PT UK

Men Women


It is interesting to note that older women in the UK are much more often found in low-paid,

part-time jobs compared to the other countries, with the USA coming second (Figure 2.4.10).


80 of 143

Though these two countries also show a higher low-pay incidence among older males the

international differences for them are much smaller.

In practice relatively few adults acquire new formal qualifications beyond the age of 40.

Indeed, the financial incentives to do so decline steeply with age, while the opportunity costs

of doing so become greater as earnings increase. Further, the older the worker the shorter the

pay-back period in terms of the conventional working life. In fact, a number of studies find

that overall returns to training for such workers may be negative. Because age-earnings

profiles are generally positive there is an incentive for employers to make older workers

redundant as opposed to younger workers when economic conditions deteriorate (Johnson and

Zimmerman, 1993) and this may only partially be offset by the greater productivity of older

workers due to their prior work experience and lower absence and turnover rates (Disney,

1996). It is clear that the adaptability of the older worker will increase in significance in the

European Union in the coming years, and this problem will be more pressing for those older

workers who lack basic skills.

Figure 2.4.10 Employment rates of older women by pay and working hours, 2001

21 20

5247

3225

8

2216

2721

14

44 41

4

3

3

3

6 8

53

11

4

33

5

0

25

50

75


Low-paid part-time <15h.

Low-paid part-time 15-35

Low-paid full-time

Better paid

Source: see Table 2.4.1.

In spite of the employment growth, just shown, training remains a bone of contention for

older workers. It is important for men to retain their position, and for women to gain further


81 of 143

employment and diminish the odds against continuing education in the kind of industries and

jobs in which their employment is concentrated. Whether the application of (continuing)

training is influenced by early-retirement programmes is analysed by Fouarge and Schils

(2009) using data for fourteen European countries. As expected, older workers participate less

in training in all countries analysed. This link between age and training participation is

exacerbated by generous early-retirement schemes, while more flexible schemes seem to

encourage training participation. The differential in training incidence between older and

younger workers is clearly lower in countries with a well-established tradition of continuing

training such as Denmark and Finland. Early retirement in these countries is also more

flexible and Fouarge and Schils conclude that training participation of older workers may help

to keep them in the labour market.

Immigrants, skills, low pay and labour-market assimilation

As we have seen (Table 2.4.1) immigrant workers are overrepresented in low-wage

employment in comparison with natives. While the immigrant population does not constitute

a homogeneous group it is clear that the labour-market and wider societal integration of large

sections of the immigrant population remains a major problem throughout the European

Union. The participation rates of immigrants are generally lower than those of the non-

immigrant populations and their unemployment rates higher. In many countries, the

employment rate differentials between immigrant and non-immigrant population are quite

significant, including those of second- and third-generation migrants. Moreover, immigrants

who are employed are often found in sectors with a high incidence of bad-quality and low-

paid work (OECD, 2003). Indeed, there is a clear tendency for immigrants to

disproportionately occupy the lowest-paid, worst-quality jobs. Information obtained in the

course of or after regularisation campaigns shows that illegal employment of migrants is

widespread and that working conditions in the informal sector tend to be far below standard

(OECD, 1999; Reyneri, 2001).

In most EU countries the numbers of foreigners and immigrants have risen significantly

over the past ten years, as have their proportions of the total population. The upward trend

was visible among all categories of migrants, whether they are reunifying family members,

refugees, work seekers or asylum seekers. In addition, in a number of European countries


82 of 143

children born to immigrants make up a growing proportion of overall births. This occurred

against a background of growing labour-market shortages in many European countries as

demographic developments imply an ageing work force and ultimately a declining population

of working age. In the medium term the increasing number of retiring baby boomers will in

some occupations lead to a replacement labour demand. This will necessitate a more optimal

use of the labour reserves that are available, especially among the immigrant population.

Also, additional migration may be required to fill specific shortages.

At a stimulating LoWER research conference [C3] very interesting work-in-progress

contributions were made on both the effects of immigration on the host-country labour market

and, under the heading of ‘assimilation’ the process of labour-market integration of the

immigrants themselves. We report the most important results for both.

Labour-market effects

George Borjas (Harvard), who has been a very important contributor to the debate himself,

addressed the puzzle why the main body of research on the effects of mass immigration over

recent decades on the US labour market has found such a small impact, especially on wages.

He critically examined the different methods that have been used for estimating the impact,

especially those using spatial differences that start from the apparent geographic clustering of

most immigrants. A first problem is that immigrants may not be randomly distributed but

cluster where the economy is thriving – thus giving rise to spurious correlations between

immigration and local employment conditions. Secondly, native labour may move away from

these places – thus mitigating the supply shock of immigration. Measurement error is a third

problem. Fourthly, he drew attention to the crass contradiction in the modelling of labour

demand across geographical areas between studies of the impact of the minimum wage on the

one hand and of immigration on the other hand. The former assume perfectly inelastic

demand while the latter, in contrast, presume perfectly elastic demand. Borjas concludes that

neither conclusion can be right. In his view, the factor-proportions approach at the national

level, as an alternative to geographical comparisons, is also deficient because instead of

estimating the impact it simulates it. Improved controlling for skills – defined more precisely

on both education and experience – leads to results that do show a lowering of the wage of the

particular skill group of workers where immigrants compete. As an (imperfect) alternative he


83 of 143

advocates a structural approach based on a production function that aggregates over

education/experience groups, notwithstanding the disadvantages regarding the nature of

substitution and the trend in productivity that he notes. In his view, the results are best

interpreted as concerning relative wages. Thus it seems clear that the wage response to

immigration is crucial but also not fully satisfactorily solved. Thus some puzzles remain.

Secondly, Christian Dustmann (UCL) reported on research for the UK which underlines

that considering the effects of immigration using a focus on average wages only risks to be

misleading. Instead those effects should be studied separately for different parts of the wage

distribution. In their own right, earlier and recent immigrants are better educated than native

UK whites. However, this goes together with considerable downgrading of recent immigrants

in their labour-market activity, in other words they are found in jobs demanding less than

warranted by their levels of skill. The effects go two ways. First, non-immigrant individuals

in the middle of the wage distribution actually gain from immigration, while individuals at the

bottom of the distribution lose in terms of their wages. These effects can be quantified as

follows: 1 percent increase in the ratio of immigrants to natives in the working-age population

ratio incites:

• 0.5 percent decrease at the first decile of the distribution,

• 0.6 percent increase at the median

• 0.4 percent increase at the ninth decile.

The overall wage effects of immigration over a longer period are that an increase in the

migrant population by 1 percent of the native population induces an average increase in native

wages of around 0.4 percent. It implies that, given an average yearly increase in the ratio of

immigrants to natives over the period 1997–2005 of 0.35 %, and an average real-wage growth

of just over 3 percent, immigration contributed less than a twentieth of annual real wage

growth over the period.

Kahanec and Zimmermann (2009) suggest that skilled-labour immigration has a

substantial potential to reduce inequality in the receiving countries. An important channel is

the rise in relative wages of the unskilled with respect to the wages of the skilled. Unskilled

immigration seems to generally increase inequality, but under specific circumstances it may

decrease it. For instance, if migrant adaptation overcomes downgrading, immigrants may turn

from low- to high-skilled workers. But the relationship between inequality and the presence of


84 of 143

immigrants in the economy is not trivial. Complementarities between skilled and unskilled

(immigrant) labour and ethnic capital, or the role of skilled and unskilled immigrants in

satisfying the taste for variety in the host economy, may affect inequality in complex ways.

One has to be aware also of the different institutional and social histories of immigration and

inequality across countries. Immigrants differ across countries, not only in terms of ethnic

origin but also in terms of educational attainment, ethnic identity, and societal and economic

aspirations. The flow of labour migration depends on incentives, but also on inequality in the

sending and receiving countries. The relative inequality in the source and destination

countries affects the prospects of immigrants with different skill levels differently, and thus

feeds into the selection of immigrants across destination countries. Many immigrants do not

remain migrants forever. Some of them assimilate, some integrate, some return, and some

remain trapped to different degrees in social and labour-market exclusion. The dynamics of

the allocation of immigrants across these states importantly affects their labour-market

position as well as that of the natives and thus inequality.

Assimilation

The other issue concerns the effects on the migrants themselves, the way they adapt to the

new environment. According to Timothy Hatton (U. of Essex and Australian National

University) economists focus on the individual immigrant assimilating in a (largely)

anonymous labour market, while sociologists focus on the immigrant community (or ethnic

group) as a whole and its relationship with the mainstream culture. However, the distinction

between these approaches has narrowed in recent years as economists have focused more on

the effects of ghettos and language concentrations, and sociologists on quantitative measures

of assimilation. Considering immigrants as communities shifts the focus to how immigrants

are received by the host population. Hatton’s hypothesis is that the more ‘established’ is the

tradition of immigration from a given source, the more integrated that ethnic community will

be and the more easily new immigrants will assimilate. Hereto he presented the American

experience of integration across source regions of immigrants and considering alternative

measures such as older stock versus new inflows, intermarriage with natives, and public

opinion surveys over the period 1980–2000. He finds that immigrants assimilate as

individuals but also as communities. This is because part of the assimilation process reflects


85 of 143

the attitudes of the host society towards immigrants from a given origin. Immigrants’ earnings

are a negative function of the present stock from that origin and a positive function of the past

stock. Higher past/present stock ratios are associated with more positive attitudes in the host

population and with greater social integration. The melting pot still works though it may take

a long time.

Pascal Beckers and Lex Borghans (Maastricht U.) studied clustering effects more directly

focusing on the effects of non-Western neighbourhood concentration of immigrants into the

Netherlands on their labour-market outcomes attempting to control methodologically for self-

selection into neighbourhoods by restricting the study to asylum seekers who are randomly

spread across the country by the government. They find indications of some negative

selection into immigrant neighbourhoods. Methodologically, they go beyond linear modelling

and find that increased concentration hurts for low levels, but becomes beneficial for high

levels of concentration. Interestingly, men are less affected by concentration in their

probability of getting a job, while women are less affected in their wages.

Shahamak Rezaei (Roskilde University) chose an important focus on entrepreneurs,

assuming that enterprise owners (immigrant or non-immigrant) act rationally upon the

available options and economic incentives in an attempt to supersede traditionally used

ethnic/cultural explanations of the choices made by immigrant enterprise owners because of

their rather limited explanatory strength and unconstructive perspectives. He finds that when

financing the start-up of an enterprise, a 60% majority of immigrant enterprise owners rely

entirely on their own savings or loans from their family or friends rather than obtaining loans

from Danish banks. Would-be entrepreneurs intend to rely even less on bank loans.

Olof Åslund, Bernt Bratsberg, Oddbjörn Raaum, Dan-Olof Rooth and Michael Rosholm

presented a first approach using Borjas’s synthetic cohort method to employment assimilation

patterns for immigrants into Scandinavia between the mid-1980s and the early-2000s, using

repeated cross-sections of longitudinal register data. They conclude to severe employment

assimilation problems in Scandinavia but also mention analytical problems of attrition and

selective return migration (which can be substantial), differential effects of the macro-

economy on groups, and the need to find unbiased cohort profiles.

Riccardo Faini, Allessandra Venturini and Claudia Villosio undertook for Italy a

comparison of native migrants – a strong post-war tradition – and foreign immigrants to study


86 of 143

the effect on wage assimilation to native locals of language knowledge, which expectedly is

the main difference between the two migrant groups. Analyzing (unfortunately imperfect)

linked employer-employee work history data, they conclude that native migrants never fully

catch up with locals and that foreign immigrants never catch up with native migrants. The

labour-market situation affects native locals more strongly, which is no surprise as they are

less mobile than the other two groups. For native immigrants some effect remains which

could be discrimination, different quality of original education or language in a broader sense

of the word (including regional food and football). Language and social capital matter in the

assimilation of foreign migrants, though experience on the job diminishes the gap. Ethnic

groups play a negative role, at least at the beginning, but primarily and surprisingly especially

for native migrants.

Migration from the new member states, which grew strongly after Accession in 2004,

received special attention. Gerard Hughes (Trinity College Dublin) considered migration from

Central and Eastern Europe up to 2006 for their effects on migration policy in Ireland in

relation to the intended extension from the 10 new member states of 2004 to Romania and

Bulgaria. Over the period 1998 to 2006 the foreign-born workers share of the Irish labour

force increased from 3.2% to 10.4%, while the share of EU10 immigrants among this total

grew from 5 to 60%. Immigration stimulated GDP growth and helped to avoid labour

shortages with half of all new jobs since end 2004 filled by immigrants. However, concerns

are emerging as immigration is also straining infrastructure and public services and goes

together with a lack of implementation of employment law and the statutory minimum wage

which social partner action and new government regulation seek to remedy, especially

through the establishment of Office of Director of Employment Rights (ODERC). More time

will be needed to judge the effectiveness of the new office. In the meantime transitional rules

were applied to the two new countries, partly to help maintaining the Common Travel Area

with the UK.

Stephen Drinkwater, Michal Garapich and John Eade (U. of Surrey) analyzed EU

enlargement and the labour-market outcomes of immigrants in the UK, with the help of UK

labour-force survey data and the survey of Surrey’s Centre for Research on Nationalism

Ethnicity and Multiculturalism (CRONEM). The focus is on Poles who make up two-thirds of

new member states (EU8) work entrants between 2004 and 2006. Most recent migrants have


87 of 143

found low-wage employment, despite some having fairly high levels of education – returns to

education appear to be lowest for EU8 migrants. It will be interesting to observe if these are

just entry-level jobs for EU8 migrants choosing to stay or whether there will be upward

mobility. However, data on stays are very thin, and first indications from the LFS suggest that

there has been relatively little change for recent EU8 migrants staying over a year.

Interestingly, many have migrated on a short-term basis and seasonal migration may be an

optimal strategy in the face of migration costs.

Finally, Eskil Wadensjö (SOFI, Stockholm) showed how migration from the Accession

States to Sweden increased after the enlargement of the European Union, though it still is only

a small part of tot immigration. Among employed immigrants from the Accession States the

working hours are shorter and the monthly wages for full-time work are lower compared to

those of people born in Sweden but the differences are relatively small. There is no indication

that the new immigrants are over-represented in the welfare state schemes which were the

focus of the pre-enlargement debate: social assistance and support to migrant family members

living in the home country. A similar observation was made by Hughes for Ireland.

2.5 Unemployment, the macro-economy, institutions and policies

At the LoWER3 Concluding Conference of April 2008 [C6], introduced by Nobel Laureate

Robert Solow, significant contributions were made regarding the analysis of the macro-

economy and unemployment in relation to institutions and policies. These fields provide an

essential structural background to the development and functioning of the low-wage labour

market. Most papers were published in a separate issue of the Oxford Review of Economic

Policy, together with the overview paper of low-wage employment in 13 EU countries and the

USA on which preceding sections have drawn (Salverda and Mayhew, 2009).

Schettkat and Sun (2009) shift the perspective on the long history of rising and persistent

unemployment in Europe. Almost all welfare-state institutions – employment protection

legislation, unions, wages, wage structure, unemployment insurance, welfare state etc. – have

been found guilty of this tragic development, be it on their own or in interaction with external

shocks. However, the interaction of adverse shocks and tight monetary policies may have


88 of 143

been the major – although probably not the only – cause of unemployment in Europe

remaining at ever higher levels after each recession. However, based on the assertion of the

neutrality of money in the medium and long run, the search for causes has shied away from

the monetary policy of central banks. Schettkat and Sun’s fill the gap with a study of the

monetary policy of the German Bundesbank, in comparison to the Federal Reserve. They find

the Bundesbank’s policy to be asymmetrical in the sense that the Bank did not actively fight

against recessions but dampened recovery periods and thus constrained growth and kept

German unemployment at higher levels.

In a similar vein Holmlund (2009) argues that the steep rise in unemployment in Sweden

in the early 1990s, from 2 to 8 percent, was mainly the result of a series of adverse

macroeconomic shocks, partly self-inflicted by bad policies and partly caused by

unfavourable international developments. The extremely contractionary monetary policy in

1992 appears to have had strong and long-lasting effects on unemployment. Institutional

factors do not appear as promising explanations of the steep rise in unemployment in the early

1990s.

Bassanini and Duval (2009) revisit the debate on the quantitative impact of institutions on

unemployment, where there is no or only limited consensus and which has led some to

question the case for institutional reforms. Taking from recent studies that institutions interact

with each other and cannot be analysed in isolation, they explore the institutional

determinants of unemployment. They show that, although the impact of each individual

policy varies across countries due to policy interactions, inferences can still be drawn for

countries with an average mix of institutions (not necessarily a real country case). Adding

interaction of individual policies with the overall institutional framework they find relatively

robust evidence of broad reform complementarities in this average context.

Amable (2009) elaborates on the consequences of some structural reforms for the

institutional coherence of OECD countries, particularly Continental Europe, and on their

economic performance, particularly regarding employment. Because institutions in developed

political economies are interrelated through a complex network of complementarities,

institutional change has consequences beyond the area concerned by a reform. This also

implies that there are complementarity effects in reforms themselves.


89 of 143

The general orientation of structural reforms has been a move toward liberalisation and

deregulation of markets. A complementarity between deregulated product markets and

flexibilized labour markets is supposed to lead to an improvement in the employment

performance. However, empirical tests do not support the existence of such a

complementarity. This does not imply the general non-existence of liberalized market-based

complementarities, but could be the consequence of the diversity of capitalism within OECD

countries. The implementation of some market-based structural reforms, even in conjunction


principles into liberal market economies. An increase in product market competition may go

together with increased employment protection, or a decrease in employment protection could

increase demand for social security. A challenge of reform programs is therefore to achieve a

new type of complementarities between reformed institutions. Another reform strategy

attempts to combine flexibility in labour markets with security through social protection.

Empirical tests lead to question the economic efficiency of such an arrangement. Active

labour-market programmes rather than diminished employment protection would seem to be

the crucial element to combine with a generous welfare state in the search for labour-market

efficiency. Other tests raise the question of the political conditions for the stability of a

flexicurity strategy. Generous welfare states have been possible in countries where the

organized labour movement has been strong enough. Welfare-state institutions are therefore

generally associated with institutions that protect workers, such as employment protection

legislation. While not ruling out the possibility for a future emergence of a political trade-off

between employment protection and social security, the results presented above emphasize

the socio-political compromise upon which the institutional architecture of the modern

economies are built.

Finally, Howell and Rehm (2009) consider evidence for the orthodox view that access to

generous unemployment benefits has played a leading role in explaining the cross-country

pattern of unemployment since the early 1980s. They find that empirical support for this is far

less compelling than widely believed. The presumed causal link between unemployment

benefits and unemployment – driven by the work disincentives that stem from a smaller gap

between income from employment and income from benefits – need not hold, or may hold

weakly if workers get substantial utility from employment and disutility from unemployment,


90 of 143

and if workers know that they face scarring effects of unemployment on future wages and

employment.

The micro evidence on the effects of benefits on the duration of compensated

unemployment has become modestly supportive of the conventional view with the advent of

improved quasi-experimental studies of large changes in program generosity. While overall

effects are small in magnitude, the largest impacts are found for workers with the least labour-

market attachment. These demographic differences should be recognized in discussions of

policy reforms aimed at reducing high unemployment that prevails across groups. At the same

time, the implications that policy reforms reducing benefit generosity may have for the

unemployment rate through reducing the duration of a worker’s unemployment spell are

ambiguous, since this may simply change the composition of the unemployed (more

previously unemployed with benefits are now unemployed without them, or get jobs and

reduce employment opportunities for others) or encourage workers to drop out of the formal

labour market.

The macro evidence is also widely held to lend strong support for the orthodox account.

Simple correlation evidence has frequently been cited in support of a causal benefits-to-

unemployment effect, but their reading of this evidence is that it is quite thin, often based on

uncritical interpretations of weak correlations among poorly designed benefit indicators.

Results using the OECD's superior new net replacement rates show little association in either

levels or changes with unemployment and employment rates across the standard 20 OECD

countries. Indeed, the coefficients are often large with the wrong signs. After several decades

of close attention to these issues by economists, policy makers and program managers,

national benefits systems have been carefully scrutinized to identify reforms that will

minimize work disincentives. In the view of Howell and Rehm, cross-country regression tests,

no matter how well designed, are unlikely to provide much useful guidance for such reforms.

In order to identify the reforms beneficial for each country, there is a need for careful country-

specific analysis of the full costs and benefits of benefits-related policy changes.

Finally, scrutiny of the functional distribution of income, or the income shares of the factors

of production – labour, land and capital –, in a Oxford Handbook chapter and an invited

contribution in the Oxford Review of Economic Policy add to the above.


91 of 143

The Handbook chapter (Glyn, 2009) argues that trends in factor shares are still relevant for

both normative and positive analysis of how capitalist economies function. As highlighted by

an analysis of the USA, trends in the salaries of the top 1% of incomes can have a marked

effect on labour’s share, which raises the question of how compensation of this kind is and

should be treated. This relates to the broader issue of how changes in factor shares influence

the personal distribution of income, where new research points to the importance of the

complementarity between capital and medium- and high-skilled labour as compared with low-

skilled labour, which tends to be a close substitute for capital. This may directly affect

inequality. A review of the long-term evidence for a number of countries confirms earlier (but

often forgotten) findings that labour’s share has not been constant over time, with many

countries showing pronounced upward trends until the end of the 1970s. The period since

1980 has seen a sharp reversal of the upward tendency, with falling labour shares in most

countries. The muted trends in the USA are notable. A number of studies have suggested this

reversal has been influenced by globalization and product market deregulation, whilst

contradictory conclusions have been drawn for the impact of policies and institutions that

support the bargaining position of workers.

Atkinson (2009) suggests three ways in which the study of factor shares is relevant today.

The ground covered is diverse – from national accounts to cost functions to fairness –,

intentionally, as in Atkinson’s view, economics has become too splintered into sub-disciplines

as a result of overspecialisation. There is a great need, particularly at this juncture, to unify the

different branches of economics. The link between macro and micro is essential, and

economics has suffered from allowing these to go their separate ways. Empirically, the

national accounts need to be brought closer to micro-data on households. Theoretically, the

aggregate analysis of distribution needs to look at both profits and the wages of heterogeneous

workers. Growth theory, macroeconomics, and labour economics are all part of the mix.


92 of 143

3. Summary and conclusions for policy and further research

With the support of the 6th Framework Programme, LoWER3 (August 2004 – April 2008)

has extended the European Low-wage Employment Research network by a third phase –

following two preceding phases (1996–1998, 2000–2004) which had received support from

the 4th and 5th Framework Programme respectively. Since its start 12.5 years earlier the

network has consistently brought together studies of the functioning of low-wage labour

markets in a broad setting that embraces labour demand and product demand, and policies and

institutions, and is based on a strong internationally comparative perspective. The LoWER

research portfolio includes among others:

• low pay and low skills,

• minimum wages and employment,

• wage inequality and earnings mobility,

• gender equality in (low) pay and (part-time) labour markets,

• service-sector demand patterns and aggregate employment,

• poverty and social protection,

• training and employer behaviour,

• labour-market institutions, and

• the meso-economic and macro-economic background to low-wage employment.

Over the three phases the approach has been result-driven and it has met with considerable

success, witness

• the organisation of 27 conferences and workshops, and

• the production of 8 books with leading scientific publishers, 4 special issues of

scientific journals, 3 special reports to the Commission, 2 dissemination books and 11

working papers (see Annex 4), with a direct bearing on labour and social policy.

During the third phase of activities reported here, 11 of the above 27 meetings were held. This

led to the publication of 3 journal issues, 4 working papers and, as the culmination, the

Oxford Handbook of Economic Inequality – apart from one book that dated back to the second


93 of 143

phase (LoWER2) but was actually published in 2005. From the studies conducted during this

phase this report has brought together the insights and findings in the preceding chapter.

Below we now, first, summarise those, and subsequently bring to the fore the issues in need

of further research, and, finally, discuss their possible policy implications.

3.1 Main research findings

The network set out in 2004 to study mobility – intra- and intergenerational –, gender, and

training, and linked this to the macro-economy and the role of institutions and policies which

provide an important context. Invariably, this was done in relation to low pay, low skills and

inequality. Other important dimensions of the studies concerned households, age, and migration.

Five main findings can be summarized as follows.

The first issue on which LoWER3 has made significant progress concerns part-time

employment. Its level is high to very high in certain countries and increasing in most. However,

research shows that the shorter working hours are the higher the incidence of low pay is, with

surprisingly small international differences given significant aggregate differences in low-wage

incidence. In addition, earnings mobility is reduced for part-time workers compared to full-time

workers. A part-time pay penalty also seems to substitute for the gender pay penalty. The effect

on female pay is much the same as women are strongly overrepresented in part-time

employment. Workplace segregation was found to contribute significantly to the full/part-time

earnings gap for both males and females; part-time employees work in more feminized

workplaces and their earnings are lower. Clear negative effects have been found in a dynamic

perspective for the earnings careers of women when they change from full-time to part-time

employment. Such penalties last well after resumption of full-time hours. Mothers’ right to

work reduced or flexible hours while staying with the same employer leads to very different

outcomes from right to ‘request’ which need to be ‘considered’ only by the employer. The

individual right of reducing working hours in the same job without a negative effect on pay may

help spreading part-time jobs more broadly across job levels and the economy and therewith


94 of 143

ultimately reduce the effects of occupational segregation that keep women prisoner of low-wage

jobs.

Evidently very closely related to this is the position of women. They generally face a higher

incidence of low pay and a lower upward mobility out of low pay. However, international

differences are important and particularly in Denmark the female risk of low pay is least and the

situation of adult women resembles rather closely that of their male counterparts. Childbearing,

career breaks, part-time work and the acceptance of low pay, even if temporarily by intention, all

have life-cycle implications for women. A consistent finding is that motherhood imposes

earnings penalties on women, and that these can be substantial and lasting. A range of

channels are identified: foregone work experience and dislocation of career trajectories due to

maternity breaks or the switch to part-time work, self-selected segregation into lower-paying

‘female’ occupations and workplaces to match working time to domestic schedules or reduce

human capital depreciation during breaks. Differences across occupations in the rate of skill

depreciation during employment breaks and corresponding profiles of gender segregation and

wage differentials across occupations may be identified in many countries, suggesting

common motivations.

The employment and wage effects of fertility- and motherhood-friendly policies of longer

parental leave and increased part-time employment, which have the objective of promoting

gender equity in employment, are themselves potentially damaging for mothers’ employment

status.

At the lower end of the household-incomes distribution, what does or does not work in

fighting poverty appears to depend heavily on context. Reforms to reduce household

joblessness would cause big drops in child poverty in some countries, but would hardly have

any effect in other countries. The same applies to policies aimed at reducing single-

earnership. Nowhere, however, would boosting employment – an increasingly popular policy

instrument – suffice to bring child poverty down to the level of the best-performing countries.

Countries that perform best in this respect are the ones that already ‘before tax and transfer’

enjoy comparatively low levels of child poverty; in addition they have tax and benefit systems


95 of 143

that are comparatively effective at reducing these levels. There is a good deal of overlap in

being a good performer in both respects.

Low skills have strong low-pay effects, in Denmark and the Netherlands in particular. There is a

potentially enhanced intergenerational persistence of inequality as a result of increased

participation in higher education, which strengthens the relationship between family

background and educational attainment. Outcomes correspond with deprived backgrounds,

and cognitive abilities are not more important than self-esteem, personal efficacy and

concentration. The important effects of young age as well as state dependency (that is, being

previously low paid) on the probability of being low paid serve to underline the largely

overlapping position of the low paid, the low skilled and youths vis-à-vis continuing training.

In a perspective of the coherence of socio-economic institutions and the concomitant diversity

of capitalism in OECD countries, two popular reform strategies were subjected to empirical

tests. Firstly, the supposed complementarity of the strategy of deregulating product markets

and making labour markets more flexible is put into doubt. It may not be enough to transform

political economies based on different principles into liberal market economies. Secondly, the

reform strategy that combines flexibility in labour markets with security through social

protection may not lead to an economically efficiency arrangement. Active labour-market

programmes rather than diminished employment protection would seem to be the crucial

element to combine with a generous welfare state in the search for labour-market efficiency.

3.2 Progress of research and future agenda of unresolved issues

The LoWER3 project has ventured extensively beyond the state of the art in several ways.

First, it refined the knowledge of low pay and extended this across many countries. From

the network’s fruitful link to the activities of the Russell Sage Foundation project Low-wage

Work in Europe, from the efforts it put in the Oxford Handbook of Economic Inequality, and

from the further elaboration on that in the Oxford Review of Economic Policy, it can be

concluded that the main dividing line between countries with lower and higher rates of low-


96 of 143

wage employment does not run any longer between Europe or the Continent on the one hand

and the USA on the other but can be clearly observed within the European Union. In this

respect Germany has, with a rapid increase in recent years, moved to join the notorious band

of countries with a high incidence of low pay such as the UK and the US. At the same time

countries such as Denmark and France have managed a persistently much lower or even

declining incidence. Their incidence is close to 10 per cent of employees while that of the

high-incidence countries is between 20 and 25 per cent.

Secondly, the network brought together different strands of empirical research to consider

the combined effects on low pay. The rise of part-time employment and of female

employment and the problems of mobility out of low earnings largely overlap ,and all point in

the direction of aggravating problems of low pay. The work of LoWER added to the standard

comparison of part-time to full-time employment in cross-section – which generates the

familiar pay penalty for working part-time –, a comparison over time of women who change

from a full-time job to a part-time one. In many cases, they incur a pay penalty which turns

out to be persistent and not easily remedied by a later return to a full-time job.

These conclusions would not be complete without stating that important questions remain for

further research in many respects. Before discussing these in more detail we need to stress the

dearth of detailed comparative data. Regarding the coverage of data and the ease of accessing

them the European Union lags far behind the US and signs of improvement seem

contradictory. The network did exploit the European Community Household Panel (1994–

2001) data to the full but much to its regret had to stop the detailed analysis of low pay in the

year 2001. After that year the ECHP was discontinued. Its replacement with the new EU-

SILC dataset has left a substantial gap in time and the latter provided also much less of the

detail needed for the same type of studies of low pay that were performed on the basis of the

ECHP. In addition, fully comprehensive European structure of earnings data, which match

firm and employee information, are not forthcoming. Though some progress has been made,

witness the very fact of the increased regularity of the surveys and their extension to other

branches of industry, the restriction to firms with at least ten employees remains a crucial

hindrance to any adequate study of low pay. In the low-wage labour market small enterprise


97 of 143

and the self-employed play a very significant role which as a result escapes proper scrutiny

with these data. We now turn to issues for further research.

First, in the field of intragenerational mobility research a major challenge for future research

is to find out what in the family other than income is important for the future of children.

Maybe the now very active research in behavioural economics and neuro-economics will

provide a deeper understanding of the causes of strong family income associations.

The study of intergenerational inequality is relatively undeveloped in comparison to the cross-

sectional inequality literature, due in part to more stringent data requirements. High-quality

person-based panel data are still relatively rare. And past efforts to assemble uniform ex ante

panel datasets across countries have met with mixed success. Enhancing current country-

based panel data and building new ones in other countries is necessary for better

understanding of economic mobility over time as well as other types of dynamic social

processes. Despite their relative scarcity, greater use of existing panel data for cross-national

comparative purposes is still possible. Few studies have used multiple measures of well-being

across countries. Contrasting different measures of well-being within and across countries in

integrated studies should increase our understanding of the role of different institutions

(labour markets, family, and government) in contributing to mobility over time and in the

reduction of inequality.

As existing panel data sets have matured and administrative files have become more

accessible, the intragenerational mobility literature has begun to examine whether mobility

has changed over time. This literature is progressing rapidly in the United States. Few studies

exist for EU countries and no comparative international study has explored temporal patterns

of mobility. The largest gap in the intragenerational mobility literature is the lack of

systematic attempts to relate mobility to policy-relevant variables. Studies focusing on

patterns of mobility across demographic subgroups have examined the role of taxes and

transfers. Extending these studies to explore the roles of specific public programmes and

behavioural mechanisms would provide a major advance within the literature on

intragenerational mobility.


98 of 143

Second, at the more practical level, the maintenance and improvement of data quality

regarding poverty remain imperative. Some population groups prone to poverty and social

exclusion remain underrepresented in surveys, migrants for example. Income and deprivation

measurement generally needs to be further developed and refined, with panel data being an

essential ingredient despite the problems associated with panel attrition. The more

fundamental challenges lie in deepening our understanding of the processes at work at

individual, household, national, and cross-national level. While much has been learnt about

the characteristics associated with poverty in different countries, the fact that this differs so

widely across countries provides a window into the nature of the underlying processes that

has not been fully exploited. In the same vein, studying the factors associated with change

over time in a specific country is valuable but putting these changes in a comparative

perspective adds another dimension. So a panel-of-countries approach has increasing potential

as the statistical underpinning in terms of comparable data continues to be built. This can be

complemented by continued development of the potential to carry out micro-simulation

analysis in a comparative perspective; the challenge of incorporating behavioural responses

into such analysis remains substantial. Exploiting the potential of panel data will continue to

be a priority, for example to reliably distinguish those genuinely and persistently on low

income, and understanding the barriers to income smoothing facing those on low income

more transiently.

The growing recognition of the multidimensional nature of poverty and social exclusion

points to the need to further the understanding of the linkages between different forms of

deprivation and exclusion, moving beyond descriptive analysis of the extent to which they go

together to the study of the processes that underpin the underlying relationships between them

– where once again a comparative perspective is invaluable – and also addressing the difficult

conceptual issues involved.

Third, for research on the gender dimension not the least question is what the implications are

for the incentives for women to acquire a better education? Given the fact that not all part-

time jobs carry pay penalties it will be helpful to know the options of stimulating high-level

part-time jobs to alleviate the pressures of skill-mismatch. Speaking about gender and

economic inequality more broadly, the Oxford Handbook mentions the need for further


99 of 143

research on the sudden and pervasive increase in women’s participation in education and on

the future of customary female specialisation in household labour when a continued

narrowing of the gender pay gap would further reduce the basis this has in opportunity costs.

In the end economic analysis of gender inequality may need a new paradigm of female

identity formation through the joint determination of education, employment, and fertility.

Fourth, regarding firms making better data available is the first priority. In general, better

theoretical models are needed, and it is to be hoped that there will be new theoretical work

that can be applied to such data. The great variation in outcomes for low-wage across

industries provides strong evidence that “one size does not fit all” when it comes to studying

the low-wage labour market. Further research should focus more deeply on an industry-by-

industry analysis. In this vein, it is worth noting that important insights can be gleaned from

working with qualitative researchers, who understand the forces affecting the labour market in

a deeper fashion than can be apparent from examining large-scale datasets.

Fifth, on migration, given the complexity of the effects and causes that the relationship

between migration and inequality involves, research on the causal effects of migration on

inequality in the host and sending countries as well as on world inequality is urgently

required. Though already many parts of this link are understood, the big picture is unclear,

partly due to the lack of data. Some of the specific issues that need further attention include (i)

the effects on sending countries generated by the brain drain, (ii) the inter-relationships

between immigration, immigration policy, attitudes towards immigrants, and immigrants’

labour-market outcomes, and (iii) the interactions between immigrant assimilation, ethnic

capital, and immigrants’ labour-market outcomes.

Finally, concerning the macro-economy and institutions, there is a great need, particularly at

this juncture, to fight scholarly over-specialisation and unify the different branches of

economics. Theoretically, the aggregate analysis of the distribution needs to look at both

profits and the wages of heterogeneous workers. Growth theory, macroeconomics, and labour

economics are all part of the mix. Empirically, the national accounts need to be brought closer

to micro-data on households.


100 of 143

Important issues for future research regarding factor-income shares of labour and capital

include, first, an improved collection of data and, second, a deeper analysis of trends and

country differences using uniform methods for measuring the labour share, cross-section and

intertemporally. Combination with other (new collections of) long-run statistics, such as those

on top incomes, can improve understanding of how the labour share has evolved and would

reveal the extent to which the USA is a special case, where the share has remained roughtly

unchanged. The analysis can be extended in two directions: understanding the dynamics of

the labour share itself on the one hand, and its relation to the distribution of personal incomes

on the other. Long-run trends in labour shares can be related to structural change and political

shifts. An obvious example is the great reversal in trend from around 1980 onwards.

Institutional changes and differences such as union bargaining power, product market and

capital market deregulation come to mind most readily in this context, but also differences

and trends in industrial composition as, for example, the high share of financial services in the

UK and USA, of manufacturing in Germany, and of tourist services in certain other countries.

As to institutional determinants of unemployment more comprehensive analysis of

interactions through the estimation of non-linear models is advocated by Bassanini and Duval

as this might be more informative, at least of relationships prevailing for the average country

in the sample.

Esping-Andersen and Myles (2009) in their Oxford Handbook study of the welfare state

and inequality conclude to the need of a comprehensive approach in order to adequately

assess welfare-state redistribution. At a minimum, such an approach needs to incorporate

taxation, income transfers, and services, and to also take care of the counter-factual problem.

Additionally, it should be recognized that income inequalities, poverty, and government

responses are surely also a function of the society’s underlying demography and social

composition. Some countries are more aged than others or have far higher rates of lone

parenthood. Thus similarly committed welfare states may produce different results or need

additional redistributive efforts to reach the same end-result. As yet, no single study

adequately incorporates all the above issues. A priority for future research is to address the

counter-factual problem more comprehensively. To meet this challenge we need to develop a

simulation methodology that allows us to obtain a more reliable and realistic picture of how


101 of 143

market-based inequalities are patterned by the welfare state. This can yield major insights into

the influence of welfare states on the market-based distribution of income.

3.3 Policy implications

We can draw a number of implications from the above results that may inspire policy makers in

relation to low pay across six important fields: inequality and poverty, part-time employment,

gender effects in the labour market, education and training, firm human resources practices, and,

finally, the macroeconomy and the role of institutions.

Inequality and poverty

Low pay is an important element of cross-section inequality and, through higher or lower

mobility out of low pay up the earnings ladder, also of lifetime inequality. There appear to be

both important variations and similarities in the incidence of low pay across different economies.

The levels may vary but the same groups (women, youths, immigrants, low-skilled) and

employment segments (retail trade, hotels and catering, personal services, part-time jobs) are

universally overrepresented in low pay, sometimes to surprisingly similar degrees. Direct

descriptives and deeper analysis controlling for a coincidence of effects tell the same story.

International differences in earnings mobility, however, seem to be more limited, also in

comparison to the USA. We look at the general aspect here and return to the gender, skills and

age dimensions below. Important differences are found in the within-low-pay distribution, or in

other words the length of the low-wage tail. These seem to link only weakly to the presence of a

minimum wage, which supposedly has a compressing effect on the wage distribution. The great

international variation in the nature, structure and enforcement of statutory minimum wages

may help explain the disparities in the low tail of the distribution of wages, and any EU policy

initiative regarding the minimum wage should take that into account and perhaps focus first on

equalising the form a minimum wage can take before discussing its level. For example, the most

recent, simple, and widely advertised British and Irish minimum wages seem to be relatively

effective in providing a minimum threshold of pay.


102 of 143

Going beyond low pay, in the longer perspective of intergenerational, household-based

mobility and persistence of inequality, careful research finds, first, that nature and nurture

both matter for inequality transmission. These results – suggesting a minor role for the

neighbourhood and small causal effects of parental income – do not rule out that policy

interventions in the neighbourhood or parental income can be effective. But such

interventions should not be expected to generate substantial changes in the relationship

between family background and income. Second, relatively low and stable intergenerational

mobility is found to link to a strong persistence of households at the top of the (Italian)

distribution. All findings underline a continued need for policy making.

Finally, in fighting poverty countries that perform best are the ones that already ‘before tax

and transfer’ enjoy comparatively low levels of child poverty; in addition they have tax and

benefit systems that are comparatively effective at reducing these levels. There is a good deal

of overlap in being a good performer in both respects, and here lies an important problem: the

worst-performing countries have the double hurdle to overcome of both reducing pre-

transfer/tax poverty levels and putting in place more effective tax/transfer systems.

Concerns about possible work and self-sufficiency disincentive effects of more adequate

benefit systems have always proved a major obstacle to benefit improvements. As many

studies show, effective marginal tax rates for people on benefits with limited earnings

capacity can be prohibitive. Yet it is also clear that benefit adequacy and good labour-market

performance can go together. Denmark manages to combine one of the highest levels of

minimum-income protection with a very high labour-participation rate. Other Nordic

countries demonstrate that high minimum-income protection can co-exist with high labour

participation and low unemployment, when combined with strictly imposed and socially

sanctioned requirements regarding participation in training and job search programs, which,

moreover, are extensive.

Part-time employment

Part-time employment is high in some countries and increasing in most. Such growth is an

important aim of policymaking. It seems important when advocating growth of part-time jobs to

convey a focus on jobs with more substantial hours and aim at reducing the role of small jobs.


103 of 143

Clear negative effects have been found for the earnings careers of women when they change

from full-time to part-time employment, which last well after resumption of full-time hours. The

British experience sends a serious warning on the role of institutional context. Mothers’ right

to work reduced or flexible hours with the same employer leads to very different outcomes

from British mothers’ right to ‘request’, which need only be ‘considered’ by their employer.

The implication is to more strongly endorse the individual right of workers of reducing working

hours in the same job without any negative effect on pay. This may, in due course, help

spreading part-time jobs more broadly across job levels and the economy and therewith reduce

the effects of occupational segregation by gender ultimately. It will be a long process though and

more political action will be needed.

Gender

If women make choices which seem to them to best balance their commitments to providing

family care and engaging in paid employment, should we be concerned? Women are

progressing through advanced and professional education in growing numbers, often

outperforming young men, and clearly investing in preparation for careers. Underutilising this

human capital is socially inefficient; under-rewarding it is inequitable.

Though generally female employees face a higher incidence of low pay and a lower mobility

out of low pay, international differences are important and much may be learnt from the Danish

example where the female risk of low pay is least and the situation of adult women resembles

rather closely that of their male counterparts.

Childbearing, career breaks, part-time work and the acceptance of low pay, involve a nexus

of decisions on working hours, employer, occupation and childcare, shaped by individual

preferences as well as market opportunities. A consistent finding from the research reported

here is that motherhood imposes earnings penalties on women, and that these can be

substantial and lasting. On the employment and wage effects of fertility and motherhood the

main policy message is that family-friendly policies of longer parental leave and increased

part-time employment, which have the objective of promoting gender equity in employment,

are themselves potentially damaging for mothers’ employment status. Underutilising this

human capital is socially inefficient; under-rewarding it is inequitable. The contribution of

family-friendly policies to women’s employment status is constrained by the acute gender


104 of 143

segregation in childcare responsibilities; it is mothers, almost exclusively, who reduce or

adapt their labour supply, incurring wage penalties. However, that pattern may be about to

change, notably with Germany now following Sweden in allocating two designated ‘daddy

months’ of parental leave available only to fathers on a ‘use it or lose it’ basis. That raises the

intriguing question: will the wage penalty for meeting parental responsibilities continue for

women and extend to men if or when fathers as well as mothers are involved? Since the

majority of women are also mothers, gender and maternity issues heavily overlap. The role of

women in child-bearing and child-rearing currently leads to a life-time's difference in

economic status. But the majority of men are also fathers. Rebalancing responsibilities for

caring may help reveal how far there are strictly gender issues in labour-market outcomes.

Education and training

In the words of Stephen Machin (2009), the worsening labour-market position of less-skilled

workers stresses the need for government policy to devote resources towards increased and

improved skill formation and education acquisition. Education and training policy need to be

formulated with this in mind so as to ensure that future generations of workers entering the

labour market (and current workers requiring training) possess the skills needed to utilize

modern-day technologies in the workplace.

Policy makers seeking to raise intergenerational mobility need to be aware of a

potentially enhanced persistence of inequality resulting from increased participation in

higher education, reflecting the strengthening relationship between family background and

educational attainment. This suggests a need for resources to be directed at programmes to

improve the outcomes of those from deprived backgrounds, either by universal interventions

that are more effective for poor children, for example high quality pre-school childcare, or by

directing resources exclusively at poorer schools or communities. These programmes should

not be exclusively on cognitive abilities but also towards self-esteem, personal efficacy and

concentration. The results also suggest an urgent need to address the problem of youths who

are not in education, employment or training (NEETs), owing to the strong link between

parental income, early unemployment and future earnings. The important effects of young age

as well as state dependency, i.e. being previously low paid, on the probability of being low


105 of 143

paid serve to underline the need to radically improve the position of the largely overlapping

low paid, low skilled and youths vis-à-vis continuing training.

Firms’ human resources policy

Though there is a dearth of good (panel) data linking firms and employees, especially at the

EU level, results suggest, first, that accounting for firm characteristics makes a very

significant contribution to understanding workers’ pay and earnings mobility, and, second,

that there is enormous and persistent heterogeneity in firm human-resources practices which

also have clearly substantial impacts on workers of all skill levels. Firm provision of training

was also found to be part of a broader approach to work motivation, job satisfaction and trust

with positive effects on cooperation in times of organisational change. These results,

combined with the fact that firms that have poor practices are more likely to exit, suggests that

one potential area for policy is opening up the black box of the firm and improving firm-level

human resources practices.

Macro-economy & institutions

Atkinson’s (2009) plea to unify the different branches of economic analysis is a plea for a

more integrated look at policy making at the same time. The link between macro and micro is

essential, and economics has suffered from allowing these to go their separate ways.

Monetary policy in Germany was shown to have been constraining of economic growth in

recoveries. Once path dependence is allowed for (through individual sorting, skill

depreciation, and other mechanisms) unemployment may be difficult to reduce after high

unemployment has persisted for a certain period. This process, however, is not an argument

against a more expansionary policy, but is in favour of it because inactivity will cause high,

long-lasting costs and should be taken into account for future monetary policy. Holmlund

observed that the extremely contractionary monetary policy in Sweden in 1992 appears to

have had strong and long-lasting effects on unemployment.

In a perspective of the coherence of socio-economic institutions and a concomitant

diversity of capitalism in OECD countries – emphasizing the socio-political compromise

upon which the institutional architectures of the modern economies are built –, Amable

subjected several reform strategies to empirical tests. These appear not to support, first, the


106 of 143

existence of a complementarity between deregulated product markets and flexibilized labour

markets. The implementation of some market-based structural reforms, even in conjunction


principles into liberal market economies. Secondly, the reform strategy attempting to combine

flexibility in labour markets with security through social protection may not lead to an

economically efficiency arrangement. Active labour-market programmes rather than

diminished employment protection would seem to be the crucial element to combine with a

generous welfare state in the search for labour-market efficiency. In addition, the political

conditions for the stability of such a flexicurity strategy are also questionable as welfare-state

institutions are generally associated with institutions that protect workers, such as

employment-protection legislation.

Bassanini and Duval find relatively robust evidence of broad reform complementarities

and the importance of the institutional context. The magnitude of such reform

complementarities appears to be moderate for the “average” OECD country, however, and no

firm conclusions can be drawn as regards the impact of specific, individual interactions across

institutions which have been singled out by previous empirical literature. Therefore, one

should avoid drawing firm conclusions from simple models featuring only a few ad hoc

interactions.

Howell and Rehm single out for further scrutiny generous unemployment benefits which

lie at the heart of the conventional explanation for persistent high unemployment, and

conclude that the available evidence does not offer compelling support. The effects of benefit

generosity on work incentives are more ambiguous in a broader behavioural framework in

which workers get substantial disutility from unemployment (given income) and know that

unemployment has scarring effects in the future. Policy reforms that reduce benefit generosity

in order to reduce the duration of worker unemployment spells have ambiguous implications

for overall national unemployment and employment rates: these programme reforms may just

substitute uncompensated unemployment for those who had been compensated; or they may

increase worker discouragement and reduce labour-force participation. We conclude that a

rethinking of policy measures for unemployment benefits is advisable.


107 of 143

Finally, when we take the various issues together the strong overarching conclusion of the

present project is that it is very important to consider the mutual, reinforcing linkages

between female employment, part-time employment, low-wage and low-quality employment,

and no longer advocate the stimulus of part-time jobs regardless of their characteristics and

effects.


108 of 143

4. Dissemination

The results of the network activities are actively disseminated but they are not of a type that

can be exploited so that latter issue is disregarded here and the focus is on dissemination.

Policy conference

A special dissemination conference for a wider audience as was organized before in Antwerp

at the end of the second phase of the network in May 2004 could not be held before LoWER3

expired in April 2008 because of intensive activities towards the end of the project. However,

at a joint workshop and press conference with the Russell Sage Foundation on 18 April 2008

in Amsterdam important new results on low-wage work in five European countries (Denmark,

France, Germany, the Netherlands and the UK) were presented. The work involved several

members of the network, and Robert Solow (MIT, Nobel Laureate Economics 1987)

contributed his strong views about the usefulness of studying low-wage jobs.

Later, in February 2009, the network was happy to present the main results at the

EQUALSOC Network of Excellence’s Policy Conference in Brussels which was organized in

cooperation with the Commission’s DG Employment and Social Affairs on the one hand and

DG Research on the other.

Written publications

Books and journal articles or issues are considered the best vector to convey the results in a

coherent way to the scientific public. Here the network has generated important output which

has now all been published at the time of writing.

Preceded in 2005 by the publication of the last book produced under the aegis of LoWER2

(Bazen et al.) the culminating point of 12.5 years of LoWER was the landmark publication of

the Oxford Handbook of Economic Inequality in February 2009, which had been three years

in the making. Some 40 of the world’s leading scholars in the field present and evaluate in 27

chapters, for a broad and important range of aspects and dimensions of economic inequality,


109 of 143

the state of the art and the core issues for future research. At about the same time three

significant complete issues of scientific journals were published which contained the results

for gender, training, and institutions and the macro-economy. Details of the Handbook can be

found in Table A.3.4, while the articles published in the issues are found in the references list.

LoWER3 Conferences and workshops

Naturally, the conferences and workshops organized by the network (Annex 3) are important

means of dissemination in their own right. Many from outside have responded to the calls for

papers and/or attended the events.

Website

An important, steady and flexible means of dissemination has been, and still is, the project

website which is hosted by the coordinator’s institute: www.uva-aias.net/lower. Taken over

from the first and second phase of the network – and maintaining the relevant information

from those two phases – the website’s technique and design was again renovated and

improved in the course of the present project.

The site specifies the aims of the network and its plan of activities and accomplishments. It

also presents all members of the network with links to additional information. It contains all

announcements to the public of network activities in particular the calls for papers that are put

out for conferences and workshops. Naturally, it makes results directly available, e.g. the

LoWER Working Papers, or links to the official publishers thereof. Through the host

institution’s website it also links to the website of the EQUALSOC Network of Excellence

with which LoWER3 cooperated on two important occasions (Seville conference and

Handbook, and Brussels Policy Conference).

Newsletters

Multiple use of the direct-mailing instrument has largely replaced the publication of formal

newsletters. Naturally, it reached the same target group but now with more timely and directly

usable information such as calls for papers, conference and workshop programmes with

invitations to participation. This was done particularly for the Annual conferences of 2005


110 of 143

and 2006, for the Migration and Gender conferences of 2007, the Training workshop and

Unemployment conference of 2008. In addition, new publications were announced at the

appropriate time including the Gregory et al. (2007), containing the results of the related

DEMPATEM (Demand Patterns and Employment Growth: Consumption and services in

France, Germany, the Netherlands, Spain, the United Kingdom and the United States, HPSE-

CT2001-00089) project, by Princeton University Press.


111 of 143

References

Abowd, J., J. Haltiwanger and J. Lane, 2004. “Integrated Longitudinal Employee-Employer Data for the United States”, American Economic Review, May

Ahn, N. and Mira, P., 2002. “A Note on the Changing Relationship between Fertility and Female Employment Rates in Developed Countries”, Journal of Population Economics, 14, 667–82.

Amable, B., 2009. “Structural Reforms in Europe and the (In)coherence of Institutions” Oxford Review of Economic Policy, 25:1, 17–39

Andersson, F., H. Holzer and J. Lane, 2005. Moving Up or Moving On: Workers, Firms and Advancement in the Low-Wage Labor Market, Russell Sage, New York

Asplund, R., and W. Salverda, eds, 2004. “Company Training and Services: Focus on Low Skills”, special issue of International Journal of Manpower, 25:1

Asplund, R., P. Sloane and I. Theodossiou, eds. 1998. Low Pay and Earnings Mobility in Europe. Edward Elgar

Anders Björklund, A., M. Jäntti, and G. Solon, 2007. “Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents”, The B.E. Journal of Economic Analysis & Policy, 7:2 (Advances)

Atkinson, A.B., 2009. “Factor Shares: The Principal Problem of Political Economy?” Oxford Review of Economic Policy, 25:1, 3–16

Bassanini, A., and R. Duval, 2009. “Unemployment, Institutions, and Reform Complementarities: Re-assessing the Aggregate Evidence for OECD Countries” Oxford Review of Economic Policy, 25:1, 40–59

Bazen, S., C. Lucifora and W. Salverda, eds, 2005. Job Quality and Employer Behaviour Macmillan-Palgrave

Beblo, M., S. Bender, and E. Wolf, 2009. “Establishment-level Wage Effects of Entering Motherhood”, Oxford Economic Papers, 61:S1, i11–i34

Bertschy, K., M A. Cattaneo, S.C. Wolter, 2009. “PISA and the Transition into the Labour Market”, LABOUR, 23:s1, 111–137

Blanden, J., P. Gregg, and L. Macmillan, 2007. "Accounting for Intergenerational Income Persistence: Non-cognitive Skills, Ability and Education," Economic Journal, 117:March, C43-C60.

Blázquez, M., 2006. Earnings Mobility and Low-wage Employment in Spain: The Role of Job Mobility and Contractual Arrangements. LoWER Working Paper No 11 (www.uva-aias.net/uploaded_files/regular/L-WP11.pdf)

Blázquez, M., and W. Salverda. 2009. “Low-Wage Employment and the Role of Education and On-The-Job Training.” LABOUR,. 23:Special Issue “Training and Job Insecurity”, March, 5–35

Bolvig, I., 2005. “Within- and Between-firm Mobility in the Low-wage Labour Market”, in: Bazen et al., 132–156


112 of 143

Borghans, L., & A. De Grip, 2000. The Overeducated Worker? Edward Elgar Brown, C., J. Haltiwanger and J. Lane, 2006. Economic Turbulence: Is A Volatile Economy

Good for America?, University of Chicago Press Bryson, A., L. Cappellari and C. Lucifora, 2009. “Workers' Perceptions of Job Insecurity: Do

Job Security Guarantees Work?”, LABOUR, 23:s1, 177–196 Buligescu, B., D. de Crombrugghe, G. Mentesoglu, and R. Montizaan, 2009. “Panel Estimates

of the Wage Penalty for Maternal Leave”, Oxford Economic Papers, 61:S1, i35–i55 Burkhauser, R.V., and K.A. Couch, 2009. “Intragenerational inequality and intertemporal

mobility”, in Salverda, Nolan and Smeeding, eds., Chapter 21 Coneus, K., K. Goeggel, and G. Muehler, 2009. “Maternal Employment and Child Care

Decision”, Oxford Economic Papers, 61:S1, i172-i188 Connolly, S., and M. Gregory, 2008, “Moving Down: Women’s Part-time Work and

Occupational Change in Britain 1991–2001”, Economic Journal, 118, F52–F76 Connolly, S., and M. Gregory, 2009. “The Part-time Pay Penalty: Earnings Trajectories of

British Women”, Oxford Economic Papers, 61:S1, i76–i97 Datta Gupta, N., Smith, N. and Verner, M., 2008. “The Impact of Nordic Countries Family

Friendly Policies on Employment, Wages and Children”, Review of Economics of the Household, 6, 65–89

Del Boca, D., S. Pasqua, and C. Pronzato, 2009. “Motherhood and Market Work Decisions in Institutional Context: A European Perspective”, Oxford Economic Papers, 61:S1, i147–i171

Duhautois, R., and F. Kramarz, 2006. Wage Bill Creation and Destruction, paper presented at CAED Conference on Comparative Analysis of Enterprise (Micro) Data, Chicago

Duvander, A-Z., Ferrarini, T. and Thalberg, S., 2005. Swedish Parental Leave and Gender Equality: Achievements and Reform Challenges in a European Perspective, Institute for Futures Studies, Copenhagen

Fields, Gary S. and Efe A. Ok. 1999. “Measuring Movement of Incomes”, Economica 66(264): 455-471

Fouarge, D., and T. Schils, 2009. “The Effect of Early Retirement Incentives on the Training Participation of Older Workers”, LABOUR, 23:s1, 85–109

Glyn, A., 2009. “Functional Distribution and Inequality”, in Salverda, Nolan and Smeeding, eds., Chapter 5

Gornick, J.C. and Meyers, M.K., 2003. Families That Work; Policies for Reconciling Parenthood and Employment, Russell Sage, New York.

Görlich, D., and A. de Grip, 2009. “Human Capital Depreciation During Hometime”, Oxford Economic Papers, 61:S1, i98–i121

Gregory, M., W. Salverda and R. Schettkat, eds, 2007. Services and Employment: Explaining the US-European Gap. Princeton University Press

De Grip, A. and M. Wolbers, 2002. “Low-Skilled Workers in Manufacturing and Services in EU Member States 1988-1997”, paper presented at LoWER conference on Adapting Education and Training for the Enhancement of Low-Skilled Jobs, Helsinki, May 24-25

Haltiwanger, J., J. Lane and J. Spletzer, 2007. “Wages, Productivity and the Dynamic Interaction of Businesses and Workers”, Labour Economics, June

Holmlund, B., 2009. “The Swedish Unemployment Experience” Oxford Review of Economic Policy, 25:1, 109-125


113 of 143

Howell, D., and M. Rehm, 2009. “Unemployment Compensation and High European Unemployment: A Reassessment with New Benefit Indicators” Oxford Review of Economic Policy, 25:1, 60-93

Jenkins S & L. Cappellari, 2004. Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response and Initial Conditions. ISER working papers 2004-08, Institute for Social and Economic Research, Essex

Jones, M.K., R.J. Jones, P.L. Latreille, P.J. Sloane, 2009. “Training, Job Satisfaction, and Workplace Performance in Britain: Evidence from WERS 2004”, LABOUR, 23:s1, 139–175

Kuckulenz, A., and T. Zwick, 2003. The impact of internal and external training on income – who gains from training?, mimeo, Centre for European Economic Research (ZEW), Mannheim.

Lam, K.H., C. Ormerod, F. Ritchie and P. Vaze, 2006. Do Company Wage Policies Persist in the Face of Minimum Wages?, paper presented at CAFE Conference on the Analysis of Firms and Employees, IAB, Nuremberg

Lane, J., The Impact of Employers on the Outcomes of Low-wage workers. LoWER Working Paper No 11 (www.uva-aias.net/uploaded_files/regular/L-WP12-1.pdf)

Machin, S., 2009. “Education and Inequality”, in Salverda, Nolan and Smeeding, eds., Chapter 17

Mason, G., K. Mayhew, M. Osborne and P. Stevens, 2008. “Low pay, labour market institutions and job quality in the UK”. In C. Lloyd, G. Mason and K. Mayhew, editors, Low-wage Work in the United Kingdom. Russell Sage, New York

McGuinness, S., F. McGinnity, P.J. O'Connell, 2009. “Changing Returns to Education During a Boom? The Case of Ireland”, LABOUR, 23:s1, 197–221

Mumford, K., and P. N. Smith, 2009. “What Determines the Part-time and Gender Earnings Gaps in Britain: Evidence from the Workplace”, Oxford Economic Papers, 61:S1, i56–i75

Nelen, A., A. de Grip, 2009. “Why Do Part-time Workers Invest Less in Human Capital than Full-timers?”, LABOUR, 23:s1, 61–83

OECD, 2008. Employment Outlook 2008, OECD, Paris. OECD, 2007. Babies and Bosses: Reconciling Work and Family Life, OECD, Paris. Pavlopoulos, D., R. Muffels, J.K. Vermunt, 2009. “Training and Low-pay Mobility: The Case

of the UK and the Netherlands”, LABOUR, 23:s1, 37–59 Phimister, E., and I. Theodossiou, 2009. “Gender Differences in Low Pay Labour Mobility

and the National Minimum Wage”, Oxford Economic Papers, 61:S1, i122–i146 Piraino, P., 2007. "Comparable Estimates of Intergenerational Income Mobility in Italy," The

B.E. Journal of Economic Analysis & Policy, 7/2 (Contributions). Salverda, W., 2007. “Low-wage Employment and the Role of the Firm”, Reflets et

Perspectives de la Vie Économique, 46:2–3, 2007, 47–63 Salverda, W., 2008. “Low-wage Work and the Economy”, in W. Salverda, M. van Klaveren

and M. van der Meer, eds, Low-wage Work in the Netherlands, Russell Sage, New York, Chapter 2

Salverda, W., 2008b. “The Dutch minimum wage: Radical Reduction Shifts Main Focus to Part-time Jobs” in: Vaughan-Whitehead, Daniel, editor, The Minimum Wage Revisited in the Enlarged EU: Issues and Challenges, International Labour Organisation, Geneva, October 2008, 291–330


114 of 143

Salverda, W., and K. Mayhew, 2009. “Capitalist Economies and Wage Inequality”, Oxford Review of Economic Policy, 25:1, 126–154

Salverda, W., B. Nolan, and T.M. Smeeding, eds, 2009. Oxford Handbook of Economic Inequality. Oxford University Press.

Schettkat, R., and R. Sun, 2009. “Monetary Policy and European Unemployment” Oxford Review of Economic Policy, 25:1, 94-108

Shields, M. A., 1998. “Changes in the Determinants of Employer-funded Training for Gull-time Employees in Britain”, Oxford Bulletin of Economics and Statistics, 60, pp. 189-214

Sloane, P., 2003. “Much Ado about Nothing? What Does the Overeducation Literature Really Tell Us?” in Büchel, A. De Grip and A. Mertens, Overeducation in Europe? Current Issues in Theory and Policy Edward Elgar

Westergård-Nielsen, N., 2008. “Statistical analysis and history of low-wage work in Denmark”. in Westergård-Nielsen, N., editor. Low-wage Work in Denmark. Russell Sage, New York

Zwick, T., 2005: “Vocational and Continuing Training” in: Marx, I. and W. Salverda (eds): Low-Wage Employment in Europe – Perspectives for Improvement, Acco: Leuven.


115 of 143

Annex 1. LoWER3 network deliverables

Deliverable No

Deliverable name Actual date (month) Lead participants

D1 Workshop 1 General LoWER Workshop [W1]

4 February 2005, at the CEP/LSE, London

1, 4

D2 Papers to Conference 1 March 2005 all

D3 Conference 1 General Annual LoWER Conference 2005 [C1]

15–16 April 2005, at the ZEW Mannheim

1, 7

D4 Executive Report 1, based on Conference 1 (P+E) $ August 2005 1, 7

D5 LoWER Working Papers 1–5#

Based on papers of Conference 1 October–December 2005 1, 12

D6 Workshop 2 LoWER Workshop Employment and Gender: Jobs, Occupations, Education and Pay [W2]

25–26 November 2005, at the Warsaw School of Economics

1, 2, 18

D7 Papers to Conference 2 March 2006 all


28–30 April 2006, at the Århus Business School / Sandbjerg

1, 16

D9 Executive Report 2, based on Conference 2 (P+E) June 2006 1, 16

D10 LoWER Working Papers 6–10 Based on papers of Conference 2 Working Paper containing LoWER Lecture by Julia Lane

October–December 2006 1, 12

D11 Journal articles on Households Insufficient good material for publication, replaced with D24

36 (-) 4, 13

D12 Workshop 3 LoWER Workshop Mobility [W3]

1–2 December 2006, at the Université de Savoie, Annecy

19, 13, 4

D13 Workshop 4 LoWER Workshop Migration [See C3]

21–21 April 2007, at the LSE London

10, 1, 4, 2

D14 Papers to Conference 3 April 2007 all


116 of 143

Deliverable No



21–21 April 2007, at the LSE London

1

D16 Executive Report 3, based on Conference 3 47 1

D17 Working Papers 11–15 Based on papers of Conference 3 Insufficient good material for publication, replaced with D24

36(-) 1

D18 Journal articles on Mobility

Two papers were published in the B.E. Journal of Economic Analysis & Policy (Vol. 7 (2007), 2) Special issue on “Intergenerational Economic Mobility around the World”

19, 14

D19 Dissemination Meeting LoWER3 Amsterdam [W5] and Brussels [W6]

Low-wage Work in Europe – Changing the Debate ? Amsterdam, 18 April 2008 (in cooperation with Russell Sage Foundation and AIAS) Brussels, 18 February 2009 Session at the Policy Conference organized by the EQUALSOC Network of Excellence in co-operation with Commission services.

1, 7

D20 LoWER Working Papers 16–20 Based on papers of Conference 3

Dropped, double with D17

D21 Final Project Report April 2009 1

D22 Book/Journal articles on Gender 8 out of 14 papers from D27 published

Oxford Economic Papers special issue Publication April 2009

2, 15

D23 Book/Journal articles on Low Skills 8 out of 11 papers from D28 published

a Labour separate issue Publication February 2009

10, 7

D24 State-of-the-art book concluding 3rd phase of the LoWER network 25 out of 26 papers from D26 published.

The Oxford Handbook of Economic Inequality Publication February 2009

1, 5

D25 The LoWER website (continuously) and LoWER Newsletter (twice yearly) Website revised

0–46 1


117 of 143

Deliverable No


D26 Joint International Conference on Economic Inequality in cooperation with EQUALSOC Network of Excellence [C5]

24–28 September 2007, Seville 1, 5

D27 Conference 4 Special LoWER Conference [C4]

What works for Women?

10–11 September 2007, Volos Greece

2, 18

D28 Workshop 4 LoWER Workshop Job Insecurity and Training [W4]

7–8 March 2008, at the FHW Berlin

7

D29 Papers to Conference 5 April 2008 all

D30 Conference 6 Concluding LoWER Conference

Institutions, Markets and European Unemployment Revisited: What Have We Learnt? [C6]

18–19 April 2008, at the AIAS University of Amsterdam

1

D31 Executive Report 4, based on Conference 4 To be done

48 1

D32 Working Papers 16–20 Based on papers of Conference 4 See D22

46 1

D33

Submission of Conference 5 papers to Oxford Review of Economic Policy as a special issue 5 out of 10 contributions from D29 were published together with 3 new contributions

Publication May 2009 1


118 of 143

Annex 2. LoWER3 network membership

No Institutions and experts

1 A. Wiemer Salverda, Co-ordinator

B. Joop Hartog Amsterdam Institute for Advanced Labour Studies AIAS, Universiteit van Amsterdam, the Netherlands

2 A. Mary Gregory B. Andrew Glyn (deceased in December 2007) Department of Economics, Oxford University, United Kingdom

3 A. Ronald Schettkat Schumpeter School of Business and Economics Bergische Universität, Wuppertal, Germany

4 A. Jonathan Wadsworth B. Stephen Machin C. Jo Blanden Centre for Economic Performance CEP D. Abigail McKnight E. Frank Cowell Centre for Analysis of Social Exclusion (CASE), STICERD London School of Economics and Political Science, United Kingdom

5 Brian Nolan Economic and Social Research Institute ESRI, Ireland. (left for University College Dublin in September 2007 and became an Associate)

6 A. Andries de Grip B. Jasper van Loo Research-Centrum Onderwijs-Arbeidsmarkt ROA, Universiteit Maastricht, the Netherlands

7 A. Thomas Zwick B. Miriam Beblo (left for Fachhochschule Berlin in 2006 and became an Associate) Zentrum für Europäische Wirtschaftsforschung, Mannheim, Germany

8 Rita Asplund ETLA Research Institute of the Finnish Economy, Helsinki, Finland

9 Ioannis Theodossiou Centre for European Labour Market Studies CELMR, Department of Economics, University of Aberdeen, United Kingdom

10 Ive Marx CSB Centre for Social Policy, UFSIA, Antwerp, Belgium


119 of 143

No Institutions and experts

11 Peter Sloane Welsh Economy and Labour Market Evaluation and Research Centre WELMERC, University of Wales, Swansea, United Kingdom

12 Stephen Bazen GRAPE, Université Montesquieu, Bordeaux, France (left for Annecy in 2005 and Université de Bordeaux was replaced with Université de Savoie)

13 A. Claudio Lucifora B. Simona Comi (left for Università di Milano Bicocca and became an Associate) Istituto di Economia dell’Impresa e del Lavoro, Università Cattolica, Milan, Italy

14 Ana Cardoso IZA, Bonn, Germany, and Universidade do Minho, Braga, Portugal

15 A. Anu Laas Department of Sociology and Social Policy B. Kaia Philips School of Economics and Business Administration University of Tartu, Estonia

16 Niels Westergaard-Nielsen Centre for Labour Market Studies and Social Research CLS and Arhus School of Business, Denmark

17 John Schmitt Economic Policy Institute, Washington, USA

18 A. Irena Kotowska B. Pawel Strzelecki C. Anna Matysiak Institute of Statistics and Demography, Warsaw School of Economics


120 of 143

Annex 3. LoWER3 network activities

Table A.3.1 Conferences and workshops

Conferences [C1] Annual Conference 2005 * ZEW, Mannheim, 15–16 April 2005 [C2] Annual Conference 2006 * Århus School of Business, Denmark; 28–30 April 2006 [C3] Annual Conference 2007 London, Centre for Economic Performance of the LSE, 20–21 April 2007 [C4] Special Conference “What Works for Women ?” * Volos, Greece, 10–11 September 2007 [C5] High-level Conference “Economic Inequality” Seville, Spain. 23–29 September 2007 (in cooperation with EQUALSOC Network of Excellence) [C6] High-level Conference “Institutions, Markets and European Unemployment Revisited: What Have We Learnt?” Amsterdam Institute for Advanced Labour Studies, 18–19 April 2008 Workshops [W1] Mobility in the Low-wage Labour Market London, CEP and CASE at the LSE, 4 February 2005 [W2] Gender and Low-wage Employment Warsaw School of Economics, 25–26 November 2005 [W3] Earnings Mobility, Intergenerational Mobility and Low Pay Annecy, Université de Savoie, France, 1–2 December 2006 (PM: Migration and Low-wage Labour London, Centre for Economic Performance of the LSE, 20–21 April 2007 coincided with [C3]) [W4] Job Insecurity and Training * Berlin School of Economics, 7–8 March 2008 [W5] Low-wage Work in Europe – Changing the Debate ? Amsterdam Institute for Advanced Labour Studies, 18 April 2008 (in cooperation with Russell Sage Foundation and AIAS) [W6] Policy dissemination workshop European Commission DG’s ESA en Research, 18 February 2009 (in cooperation with EQUALSOC) *) With Call for papers.


121 of 143

Table A.3.2 Keynote speakers and special discussants at conferences and workshops April 2005 [C1] Ronald Oaxaca (University of Arizona) Technological Change and Trends in the Gender Wage Gap Joop Hartog (University of Amsterdam) Skilling Immigrants Eckhard Wurzel (OECD) German Labour Market Reform November 2005 [W2] Inga Persson (Lund University) Some reflections on institutions and women's labour market/economic outcomes – what have we learned? April 2006 [C2] Julia Lane (NORC at University of Chicago) The Impact of Employers on the Outcomes of Low-wage Workers Sheldon Danziger (University of Michigan) Assessing welfare reform in the U.S.: From cash assistance to low-wage employment December 2006 [W3] Markus Jantti (IKI, Finland) Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents Denis Fougère (CNRS, CREST, Paris) The Returns to Seniority in France (and why they are lower than in the United States) Yves Flückiger (Université de Genève) Low Wages, Poverty and Labour Mobility: A Survey for Switzerland April 2007 [C3] George Borjas (Harvard University) The labour market impact of Immigration: What have we learned? Klaus Zimmermann (IZA Bonn) Migration potential and its labour-market impact after EU enlargement: A review Emilio Reyneri (Università Bicocca) Migrants and the underground economy in Southern Europe Christian Dustmann (University College London) The impact of immigration on the distribution of wages: new evidence for the UK September 2007 [C4] Daniela del Boca (CHILD and University of Turin) Women Work and Fertility Heidi Hartmann (IWPR, Washington) Gender, Race, and Class in the US Low-Wage labour Market September 2007 [C5] A. B. Atkinson (Oxford University), Susan Mayer (University of Chicago), Stephen Nickell (Nuffield College Oxford), Eugene Smolenky (University of California, Berkeley) Special discussants March 2008 [W4]


122 of 143

Michael Burda (Humboldt Universität Berlin) Temporary Employment Giorgio Brunello (Università degli Studi di Padova) Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe April 2008 [W6] Robert M. Solow (MIT) Why Study Low-wage employment Stephen Machin (UCL and CEP/LSE) The Plight of the Low Skilled April 2008 [C6] Robert M. Solow (MIT) Inflation, Unemployment, Institutions – Theoretical Frontiers


123 of 143

Table A.3.3 Contributions to conferences and workshops Author(s) Title Meeting* Themes** G T M O 239 66 63 58 59 1 Eckhard Wurzel*** (OECD) Labour Market Reform in Germany C1 P 2 Joop Hartog (U of Amsterdam) How important is stated homeland education for refugees´ economic position? C1 TMi 3 Ronald Oaxaca (U. of Arizona) Biased Technological Change and Trends in the Gender Wage Gap C1 G 4 Alfred Garloff, Anja Kuckulenz Training, Mobility and Wages C1 T M 5 Andries de Grip, Martin van Boxtel, Dick

Willems,Hans Bosma Overeducation and coginitive decline (preliminary version/not to be cited C1 T

6 Anna Matsyiak Part-time employment in Poland-family friendly employment form or a mere alternative for the low skilled?

C1 G

7 Anna Sanz de Galdeano, Jarkko Turunen Real wages and Local Unemployment in the Euro Area C1 O 8 Antje Mertens, Vanessa Gash, Frances

McGinnity Do fixed-term jobs always pay less? Comparing Germany and Spain using quantile regression

C1 Ma

9 Dean Baker, Andrew Glyn, David R. Howell, John Schmitt

Labour Market Institutions and Cross-Country Employment Performance: What Can Be Learned from the Latest OECD Data?

C1 I

10 Dimitris Pavlopoulos, Didier Fouarge Escaping the low pay trap: do labour market entrants stands a chance C1 M 11 Euan Phimister, Ioannis Theodossiou Low Pay employment and Low Paid Labour Mobility C1 M 12 Giovanni Russo, Wolter Hassink The Part-Time Wage Penalty: a Career Perspective C1 G 13 Hanna Kiiver, Joan Muysken Is Germany Exploiting her apprentices? A new look at over-education C1 T 14 Henning Lohmann The working poor, low wages and mobility out of poverty: A cross-country

perspective C1 M

15 Jaan Masso, Raul Eamets, Kaia Philips Gross Job and Workers Flows' Differences in Estonia C1 M 16 Jo Blanden Intergenerational Mobility and Assortative Mating in the UK C1 M 17 John Schmitt Changing patterns of economic mobility of immigrants to the United States, 1980–

2000 C1 Mi

18 Julio J. Elias The Effects of Ability and Family Background on Non-Monetary Returns to Education

C1 T

19 Luiz Diaz-Serrano, José A. Cabral Vieira Low-pay higher pay and job satisfaction within the European Union: empirical evidence from fourteen countries

C1 O

20 Maite Blazquez Low-Wage Employment and Mobility in Spain C1 M


124 of 143

Author(s) Title Meeting* Themes** 21 Mårten Wallette Transitions from Temporary to Open-Ended Jobs in Sweden: A Gender Issue C1 M Ma 22 Melanie K.Jones, Paul L. Latreille, Peter J.

Sloane Crossing the tracks? More on trends in the training of male and female workers in Great Britain

C1 T

23 Melanie Lührmann, Matthias Weiss Asymmetric Effects of Changes in Labour Supply on Labour Demand C1 O 24 Oussama Ben Abdelkarim, Ali Skalli Wage Inequality in France: The Role of Education C1 T 25 Philippe Van Kerm Gender Differences in Wage Growth and Promotion C1 G 26 Rikke Ibsen, Niels Westergaard-Nielsen Job Creation and Destruction over the Business Cycles and the Impact on Individual

Job Flows in Denmark 1980–2001 C1 M

27 Robert Plasman Michael Rusinek What is the effect of company collective agreements on the wage distribution? Evidences from 4 corporatist countries

C1 O

28 Sara Connolly, Mary Gregory Part-time Work – A Trap for Women's Careers An Analysis of the Roles of Heterogeneity and Persistence

C1 G M

29 Simona Comi Family characteristics and early career outcomes in nine European countries C1 M 30 Sonja Munz Flexibility of Working Hours and Job Mobility in Germany: The Role of the Part-

Time and Fixed-Term Act C1 M

31 Stephen Bazen The Answer to the US minimum wage puzzle? Only federal minimum wage hikes have a negative effect on teenage employment

C1 P

32 Tomas Korpi, Michael Tåhlin Skill Mismatch and wage growth C1 T 33

Julia Lane (NORC/U. of Chicago)

The Impact of Employers on Outcomes for Low Wage Workers

C2

O

34 Sheldon Danziger (University of Michigan) Assessing Welfare Reform in the U.S.: From Cash Assistance to Low Wage Employment

C2 P

35 Alex Bryson, Lorenzo Cappellari and Claudio Lucifora

Do Job Security Guarantees Work? C2 Ma

36 Anders Holm The Reservation Wage Theory, Vocational Rehabilitation and the Return to Work of Disabled Employees

C2 T

37 Andreas P. Georgiadis Is the minimum wage efficient? Evidence of the effects of the UK National Minimum Wage in the Residential Care Homes Sector

C2 P

38 Anny Matsyiak and Stephanie Steinmetz Who follows whom? Female part-time employment in West Germany, East Germany and Poland

C2 G

39 Augustin de Coulon and Jonathan Wadsworth Do Relative Gains to Migration Vary? A comparison of the Labour Market Performance of Indians in the UK, the USA and India

C2 Mi


125 of 143

Author(s) Title Meeting* Themes** 40 Beate Grundig Why is the share of women willing to work in East Germany larger than in West

Germany? A logit model of extensive labour supply decision C2 G

41 Bob Gregory Working Poor with dependent children, Partnership breakups and living on the Dole; Child Poverty in Australia

C2 G

42 Brian Krogh Graversen Making work pay: Is there an employment effect for disadvantaged families? C2 P 43 Cecilie D. Weatherall Does the last work-place experience influence the risk of becoming long-term

unemployed? C2 M

44 David Fairris and Erik Jonasson What accounts for Intra-Industry Wage Differentials? Results from a Survey of Establishments

C2 O

45 Dimitris Pavlopoulos Didier Fouarge and Ruud Muffels

Who benefits from a job change? The dwarfs or the giants C2 M

46 Elisabetta Trevisan Job Security and New Restrictive Permanent Contracts. Are Spanish Workers More Worried of Losing Their Job?

C2 Ma

47 Erling Barth The Effects of Performance on Wage Differentials within Firms C2 O 48 Heather Boushey and John Schmitt Family-friendly policies and the motherhood pay gap C2 G 49 Ian Mulheim and Mario Pisani Estimating the Labour supply effect of the working tax credit for childless

households for the UK C2 P

50 Lia Pacelli, Silvia Pasqua and Claudio Villosio

What does the stork bring to women's working career C2 G M

51 Long-Hwa Chen and Wie-Chung Wang The impact of the overtime policy reform-evidence from the low paid workers in Taiwan

C2 P

52 Marco Manacorda, Alan Manning and Jonathan Wadsworth

The Impact of Immigration of the Structure of Wages in Britain C2 Mi

53 Marloes Zijl Compensation of on-call and fixed-term employment: the role of uncertainty C2 Ma 54 Mirco Tonin The Effects of the Minimum Wage in an Economy with Tax Evasion C2 P 55 Nicolas Roys Hiring and Firing Costs: Which one is the Largest? Evidence from French Firms C2 M 56 Richard J. Jones and Peter J. Sloane Students and Term-Time Employment C2 TStu 57 Sara Pinoli Screening Ex-ante or Screening on the job? The impact of the Employment Contract C2 O 58 Stephen Gibbons and Shqiponja Telhai Peer effects and Pupil Attainment: Evidence from Secondary school Transition C2 T 59 Till von Wachter and Stefan Bender In the right place at the wrong time; The role of Firms and Luck in Young Workers'

Careers C2 M


126 of 143

Author(s) Title Meeting* Themes** 60 Tor Eriksson and Jingkun Li Restructuring and Low-wage Workers in a High-Wage Economy – the Case of

Danish Hotel Room Attendants C2 O

61 Veronika V. Eberharter Traditional Family Role Patterns and the Intergenerational Transmission of Occupational Status – Germany and the United States compared

C2 G M

62 W.S. Siebert and N. Zoubanov Management, Worker Turnover and Labour Productivity C2 M 63 Wiemer Salverda Low-wage employment and the Dutch economy and vice-versa C2 O 64 Wolfgang Lechthaler and Dennis J. Snower Minimum Wages and Firm Training C2 T P 65

Christian Dustmann (UCL)

Immigration

C3

Mi

66 Emilio Reyneri (Bicocca Milan) Migrants and the Underground Economy in Southern Europe C3 Mi 67 George Borjas (Harvard University) The labour Market Impact of Immigration: What have We Learned? C3 Mi 68 Klaus Zimmermann (IZA Bonn) Migration Potential and Its Labour Market Impact After EU Enlargement: A Review C3 Mi 69 Albrecht Glitz (ucl) The Labour Market Impact of Immigration: Quasi-Experimental Evidence C3 Mi 70 Aslan Zorlu (AIAS), Joop Hartog

(Universiteit van Amsterdam) Employment assimilation of immigrants in the Netherlands C3 Mi

71 Bernt Bratsberg, Oddbjörn Raaum, Dan-Olof Rooth (Baltic Business School, Kalmar) and Michael Rosholm

Employment Assimilation Patterns for Immigrants in Scandinavia 1985–2000 C3 Mi

72 Catalina Amuedo-Dorantes, Sara De La Rica (Universidad del País Vasco)

Labour market assimilation of recent immigrants in Spain C3 Mi

73 Daphne Nicolitsas (Bank of Greece) The relative performance of immigrants in the EU-15: Comparing new and old immigration countries

C3 Mi

74 Eskil Wadensjo (Stockholm University) Migrants from Eastern Europe in the Swedish Labour Market C3 Mi 75 Gerard Hughes (Trinity College Dublin) EU Enlargement, Migration Flows from Central and Eastern Europe and Changes

in Migration Policy in Ireland C3 Mi

76 John Schmitt (cepr Washington) and Jonathan Wadsworth (cep and Royal Holloway)

Women and Immigration C3 G Mi

77 Martin Ruhs (Oxford University) Legal Status and the Wages of East European Migrants in the UK C3 Mi 78 Pascal Beckers and Lex Borghans (U.

Maastricht) Segregation and labour Market Outcomes of Immigrants: Evidence from Random Assignment in the Netherlands

C3 Mi

79 Peracchi en Domenico Depalo (Rome Tor Vergata)

labour market outcomes of natives and immigrants: Evidence from ECHP C3 Mi


127 of 143

Author(s) Title Meeting* Themes** 80 Riccardo Faini, Alessandra Venturini (Turin

University), Claudia Villosio Are Foreign Migrants more Assimilated than Native Ones? C3 Mi

81 Shahamak Rezaei (Roskilde University) Immigrant Entrepreneurship, Ethnic Economy, Informal Economic Activities and Undocumented Workers

C3 Mi

82 Steven Drinkwater (University of Surrey) Poles Apart? EU Enlargement and the Labour Market Outcomes of Immigrants in the UK

C3 Mi

83 Timothy Hatton (University of Essex and Australian National University)

Immigrants Assimilate as Communities, not just as Individuals C3 Mi

84

Daniela Del Boca (CHILD, U. di Torino)

Women, Work and Fertility

C4

G

85 Heidi Hartman (IWPR, Washington) Gender and Race in the US Low-Wage labour Market C4 G Mi 86 Alessandra Casarico and Paola Profeta Women Education and Jobs: What Matters for Growth? C4 G 87 Alvaro Martinez-Perez Does Homogamy Lead to Differences in the Domestic Division of Labour? Dynamics

of Gender Inequalities amongst Couples Using Time-Use Data C4 G

88 Anna Matysiak Fertility and Women's Employment; from the Exogenous to the Endogenous Approach

C4 G

89 Anna Meyer and Inga Persson Does a Doctorate Work? On the Gendered Composition and Career Outcomes of PhD Cohorts in Sweden

C4 G

90 Anu Laas and Kairi Talves Women's Perception of Work and Family Conflict in Baltic Sea Countries C4 G 91 Bianca Buligescu, Raymond Montizaan and

Gulcin Mentesoglu Estimating Wage Equations for Females: A Panel Data Approach in the Presence of Endogeneity and Selection

C4 G

92 Clement Carbonnier Spouse Labour Supply: Fiscal Incentive and Income Effect; Evidence from French Fully Joint Income Tax System

C4 G P

93 Daphne Nicolitsas Female labour force participation in Greece: developments and determining factors C4 G 94 Denis Gorlich and Andries De Grip Human Capital Depreciation during Family-Related Career Interruptions in Male

and Female Occupations C4 G T

95 Dominique Meurs, Ariane Pailhe and Sophie Pontieux

How Much Does it Cost to Stay at Home? Career Interruptions and the Gender Wage Gap in France

C4 G

96 Euan Phimister and Ioannis Theodossiou Gender Differences in Low Pay Mobility C4 G M 97 Giovanni Russo and Edwin van Hooft Identity, Preferences over Job Attributes and Part-time C4 G 98 Graziella Bertocchi The Enfranchisement of Women and the Welfare State C4 G 99 Ioannis Cholezas and Panos Tsakloglou Gender Earnings Differentials in the Greek Labour Market C4 G


128 of 143

Author(s) Title Meeting* Themes** 100 Ioannis Theodossiou and Efi Vasileiou The Different Hierarchy of Job Facets Could Explain the Gender Job-Satisfaction

Paradox? C4 G

101 Jasper Van Loo and Andries de Grip Gender Differences in the Impact of HR Practices on Perceptions of Job Quality in the Public Sector

C4 G

102 Karen Mumford and Peter Smith Assessing the Importance of Male and Female Part-time Work for the Gender Earnings Gap in Britain

C4 G

103 Katherin Barg and Miriam Beblo Is it Selection or Specialisation? The Wages of Single, Cohabiting and Married Women and Men

C4 G

104 Katja Coneus, Kathryn Goeggel and Grit Muehler

Determinants of Childcare and Labour Market Participation in Germany: A Solution to Simultaneity

C4 G

105 Lorenzo Cappellari and Claudio Lucifora University Reforms and Human Capital Investments C4 T 106 Maite Blazquez and Wiemer Salverda Part-time Employment, Low Pay and Mobility: Costs and Benefits for Women in

International Comparison C4 G M

107 Mareva Sabatier Do Female Researchers Face a Glass Ceiling in France? A Hazard Model of Promotions

C4 G

108 Mary Gregory and Sara Connolly The Career Costs of a Spell of Part-time Work: Evidence for Britain C4 G M 109 Mohammad Niaz Asadullah and Rosa

Fernandez Job Flexibility and the Gender Gap in Job Satisfaction: New Evidence from Matched Employer–Employee Data

C4 G

110 Nabanita Datta Gupta, Nina Smith and Mette Verner

An Overview of the Impact of Family Friendly Policies in Nordic Countries C4 G

111 Raquel Mendez To What Extent is the Female Pay Disadvantage in Portugal Explained by Gender Differences in Occupational Distribution?

C4 G

112 Sami Napari The Motherhood Wage Penalty in the Finnish Private sector C4 G 113 Sara Connolly Equal Opportunities? Women in Science in the UK C4 G 114 Stephanie Steinmetz Gender-specific Occupational Segregation and the Role of Education in Selected

European Countries C4 G

115 Steve Bazen Who are the Highly Paid Women – or Behind Every Successful Woman is There a Successful Man?

C4 G

116 Suzanne Grazier and Peter Sloane Accident Risk, Gender, Family Status and Occupational Choice in UK C4 G 117 Tim Callan, Arthur van Soest and J.R. Wlash Tax Structures and Female Labour Market Participation: Evidence from Ireland C4 G P 118

A. B. Atkinson (Oxford University)

Special discussant

C5


129 of 143

Author(s) Title Meeting* Themes** 119 Susan Mayer (University of Chicago) Special discussant C5 120 Stephen Nickell (Nuffield College Oxford) Special discussant C5 121 Eugene Smolenky (University of California,

Berkeley) Special discussant C5

122 Anders Björklund and Markus Jäntti Intergenerational economic inequality C5 M 123 Andrea Brandolini and Tim Smeeding Income inequality C5 124 Andrew Glyn Functional and personal distribution C5 125 Andrew Leigh High incomes and inequality C5 126 Bernard van Praag and Ada Ferrer-i-

Carbonell Inequality and happiness C5

127 Brian Noland and Ive Marx Inequality, poverty and exclusion C5 128 Christopher Jencks, Andrew Leigh and Tim

Smeeding Health and economic inequalities C5 S

129 Claudio Lucifora and Wiemer Salverda Low pay C5 O 130 Francine Blau and Lawrence Kahn Inequality and earnings distribution C5 131 Gary Burtless Demographic transformation and economic inequality C5 132 Gosta Esping-Andersen and John Myles Economic inequality and the welfare state C5 I 133 James Galbraith Inequality, growth and sectoral change C5 134 Jelle Visser and Daniele Checchi Inequality and the labour market: unions C5 I 135 Jim Davies Wealth and economic inequality C5 136 John Roemer Concepts and theories of inequality C5 137 Julia Lane Inequality and the labour market: employers C5 138 Klaus Zimmermann and Martin Kahanec Migration, ethnicity and economic inequality C5 Mi 139 Mary Gregory Gender and economic inequality C5 G 140 Nancy Folbre Inequality, consumption and time use C5 141 Nolan McCarty and Jonas Pontusson Inequality and policy making C5 P 142 Richard Burkhauser and Kenneth Couch Intragenerational inequality and intertemporal mobility C5 M 143 Richard Freeman Trade, skills and globalization C5 144 Stephen Jenkins and Philippe Van Kerm The measurement of economic inequality C5 145 Stephen Machin Inequality and education C5 T 146

Robert Solow (MIT)

Inflation, Unemployment, Institutions – Theoretical Frontiers

C6


130 of 143

Author(s) Title Meeting* Themes** 147 Alan Krueger and Andreas Mueller Job Search and Unemployment Benefits: New Evidence from Time Use Data C6 S 148 Andrea Bassanini and Romain Duval International Comparison of Institutional Change and Unemployment C6 I 149 Bertil Holmlund The Swedish Unemployment Experience C6 O 150 Bruno Amable The (In)coherence of Institutions C6 I 151 David Howell How Bad are Protective Labour Market Institutions for Employment Performance ? C6 I 152 Dennis Snower, Chris Merkl, Wolfgang

Lechthaler Monetary Persistence and the Labour Market: A New Perspective C6 O

153 Richard Freeman The Ten Commandments of the OECD face the Evidence in Europe and the US C6 P 154 Ronald Schettkat and Rongrong Sun Monetary Policy and European Unemployment C6 P 155 Wendy Carlin German Economic Performance: Disentangling the Role of Supply-side Reforms,

Macroeconomic Policy and Coordinated Market Economy Institutions C6 P

156

Andries de Grip (ROA)

(informal contributions only) W1

T

157 Anna Matysiak (Warsaw School of Economics)

W1 G G

158 Anu Laas (University of Tartu) W1 G 159 Claudio Lucifora (IZA) W1 M 160 Frank Cowell (LSE) W1 M 161 Giovanni Russo (University di Catania) W1 G M 162 Ioannis Theodossiou (University of

Aberdeen) W1 M

163 Irena Kotowska (Warsaw School of Economics)

W1 G T

164 Ive Marx (CSB) W1 T 165 Jo Blanden (CEP) W1 M 166 John Schmitt (Economic Policy Institute) W1 T 167 Kaia Philips (University of Tartu) W1 T 168 Maite Blazquez (AIAS) W1 M 169 Martin Ruhs (Oxford) W1 T 170 Mary Gregory (Oxford) W1 G M 171 Pawel Strzelecki (Warsaw School of

Economics) W1 T


131 of 143

Author(s) Title Meeting* Themes** 172 Peter Sloane (University of Wales, Swansea) W1 T 173 Stephen Bazen (University Montesquieu) W1 M 174 Thomas Zwick (ZEW) W1 T M 175 Wiemer Salverda (AIAS) W1 G M 176

Inga Persson (Lund University)

Some reflections on institutions and women's labour market/economic outcomes – What have we learned?

W2

G

I

177 Anna Matysiak and Stephannie Steinmetz Is there an adoption of 'atypical' female employment? A comparison between Western Germany, Eastern Germany and Poland

W2 G

178 Anna Meyer and Mårten Wallette Absence of absenteeism and overtime work – signalling factors for temporary workers?

W2 O

179 Daphne Nicolitsas Why do so few Greek women work in the formal sector? W2 G 180 Euan Phimister and Ioannis Theodossiou Low wage labour market; gender differences in labour mobility W2 G M 181 Giovanni Russo Recruitment method, the gender composition of the applicant pool, and women’s

hiring probability W2 G

182 Ioannis Theodossiou and Alex. Zangelidis Gender differences in the job-to-job and job to non-employment turnover: does education matter?

W2 G M

183 Irma Reci Unemployment insurance reforms and their impact on unemployment durations and transitions patterns among benefit recipients: evidence from the Netherlands

W2 S

184 Jo Blanden Love and money: intergenerational mobility and marital matching on parental income in Canada

W2 G M

185 Magdalena Muszynska Gender, Opportunity Costs of Childbearing and Fertility in Europe W2 G 186 Maite Blazquez and Wiemer Salverda Changes in working hours and occupational level, towards a comparison of the

Netherlands, Denmark and the UK 1994–2001 W2 G M

187 Miriam Beblo and Elke Wolf The relative earnings positions of mothers before and after birth W2 G 188 Peter Sloane, Suzanne Grazier and Richard

Jones Gender segregation and affirmative action W2 G P

189 Rita Asplund The deteriorating employment and wage situation of young females: the case of Finland

W2 G

190 Sara Connolly and Mary Gregory Moving down? Women’s part-time work and occupational change in Britain 1991–2001

W2 G M

191 Steve Bazen Earnings inequality and job changes W2 M


132 of 143

Author(s) Title Meeting* Themes**

192 Daniele Checchi (University of Milan) 60 Years of Educational Attainments in Italy W3 T 193 Denis Fougère (CNRS, CREST, Paris) The Returns to Seniority in France (and why they are lower than in the United

States) W3

194

Markus Jantti (IKI, Finland)

Nature and Nurture in the Intergenerational Transmission of Socioeconomic Status: Evidence from Swedish Children and Their Biological and Rearing Parents

W3

M

195 Yves Flückiger (Université de Genève) Low Wages, Poverty and Labour Mobility: A Survey for Switzerland W3 M 196 Arnaud Chevalier (Royal Holloway) Maternal Education and Birth Weight W3 M 197 Cheti Nicoletti (ISER Essex) Modelling multiple sample selection in intergenerational occupational mobility. W3 M 198 I. Theodossiou (University of Aberdeen) Should I stay or Should I go? The Effect of Gender, Education and the

Unemployment Rate on Labour Market Transitions W3 G M

199 Jo Blanden (University of Surrey and CEP) Assortative Mating and Access to Higher Education W3 T 200 Lorenzo Cappellari and Claudio Lucifora

(Università Cattolica, Milan) Human capital investments, university reforms and family background: Evidence from Italy

W3 T

201 M. Blázquez (Autonoma Madrid) and W. Salverda (AIAS)

Part-time employment, low pay and mobility W3 M

202 M. Portela (University of Minho) Micro foundations for wage flexibility: wage insurance at the firm level W3 P 203 Niels Westergaard-Nielsen (Aarhus Business

School) Mobility out of low wage jobs in Denmark W3 M

204 Patrizio Piraino (Università di Siena and Statistics Canada)

Comparable Estimates of Intergenerational Income Mobility in Italy W3 M

205 Peter Sloane (University of Wales) A Persistence Model of The National Minimum Wage? W3 P 206 Roberto Torrini and Alfonso Rosolia (Bank

of Italy) The generation gap: an analysis of the decline in the relative earnings of young men in Italy

W3 M

207 S. Napri (HSE, Finland) Mobility and low pay in Finland W3 M 208 Simona Comi (University of Milan) Parental background and early career outcomes in Europe W3 M 209 Stephen Bazen (Université de Savoie) The distributional consequences of labour mobility in four European countries W3 M 210 Wen-Heo Chen (Statistics Canada) Canadian Income Mobility in a Cross-National Perspective: Are We So Different? W3 M 211

Giorgio Brunello (University of Padova)

Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe

W4

T

212 Michael Burda (Humboldt University) Temporary Employment W4 Ma


133 of 143

Author(s) Title Meeting* Themes** 213 Annemarie Nelen / Andries de Grip Part-time Employment and Human Capital Development W4 T 214 Bettina Kohlrausch A Ticket to Work? Labour Markets and Life Courses: Policies for the Young

Unemployed in Britain and Germany W4

215 Claudio Lucifora / Alex Bryson / Lorenzo Cappelari

Do Job Security Guarantees Work? W4 Ma

216 Dimitris Pavlopoulos Low-pay mobility and training in the UK, Netherlands and Germany. W4 T M 217 Fran McGinnity / Seamus Mc Guiness, Philip

O´Connell Changing Returns to Education during a Boom: The Case of Ireland W4 T

218 Gesine Stephan / Kathi Zickert Participation of Unemployment Benefit Recipients in Labour Market Measures: Germany before and after the Hartz IV Reform

W4 S

219 Ioannis Theodossiou The Health – Socioeconomic Status Relationship and the Role of Public Policies in the US and UK

W4 P

220 Jens Mohrenweiser / Thomas Zwick Costs and Benefits of Different Professions in the Dual Apprenticeship System W4 T 221 Jo Blanden / Patrick Sturgis / Peter Urwin Lifelong Learning and Social Mobility W4 T M 222 Maite Blázquez / Wiemer Salverda Mobility out of low pay, the role of education and on-the-job training W4 T M 223 Melanie Jones, Richard Jones, Paul Latreille

and Peter Sloane Training, Job Satisfaction and Workplace Performance in Britain; Evidence from WERS 2004

W4 T

224 Miriam Beblo / Renate Ortlieb The Impact of Working Conditions and Household Context on Employee Absenteeism

W4 O

225 René Böheim / Ana Cardoso Temporary Agency Work in Portugal W4 Ma 226 Rita Asplund / Mika Maliranta Training and Hiring Strategies to Improve Firm Performance W4 T 227 Ronny Freier / Viktor Steiner “Marginal Employment”: Stepping Stone or Dead End? W4 Ma 228 Stefan Wolter Wrong track in school – bad start in working life? Results from the Swiss PISA 2000

cohort W4 T

229 Trudie Schils / Didier Fouarge Participation in Training and its Effect on the Decision to Retire Early W4 T 230 Vanessa Gash Insider and Outsider Markets, Where not to Accept a Temporary Contract W4 Ma 231

Robert Solow (MIT)

Why Study Low-wage employment?

W5

O

232 Stephen Machin (UCL and CEP/LSE) The Plight of the Low Paid W5 T 233 Geoff Mason and Wiemer Salverda The Significance of Low Pay W5 M 234 Gerhard Bosch and Ken Mayhew Industrial Relations, Legal Regulations, Wage Setting and Low Pay W5 O 235 Jérôme Gautié and Niels Westergård-Nielsen The Impact of Institutions on Low-wage Labour Supply W5 O


134 of 143

Author(s) Title Meeting* Themes** 236 John Schmitt The European Results from an American Perspective W5 O 237 Tony Atkinson Recent evolution of economic inequalities in Europe W6 P 238 Sarah Voitchovsky Inequality and economic growth W6 P 239 Wiemer Salverda Inequalities of earnings and low pay W6 P *) See Table A.3.1 for abbreviations of meetings. **) G–Gender; M–Mobility; Mi–Migration; Ma–Marginal employment; O–Other; P–Policy; Stu–Students; T–Training. ***) Keynotes and special contributions in bold


135 of 143

Table A.3.4 LoWER3 network reports and publications Book The Oxford Handbook of Economic Inequality Editors Wiemer Salverda, Brian Nolan and Timothy Smeeding Oxford University Press, February 2009 (joint with EQUALSOC Network of Excellence)

Contents

Part 1 Inequality: Overview, Concepts and Measurement 1. Introduction Brian Nolan, Wiemer Salverda and Timothy M. Smeeding 2. Equality: Its justification, nature and domain John E. Roemer (Yale) 3. The measurement of economic inequality Stephen Jenkins (Essex) and Philippe van Kerm (CEPS)

Part 2 The Extent of Inequality 4. Income inequality Andrea Brandolini (Banca d’Italia) and Timothy M. Smeeding (Syracuse) 5. Functional distribution and inequality Andrew Glyn (Oxford)8 6. Wealth and economic inequality James B. Davies (Western Ontario) 7. Top incomes Andrew Leigh (ANU Canberra)

Part 3 Earnings Inequality 8. Inequality and earnings distribution Francine D. Blau and Lawrence M. Kahn (Cornell) 9. Inequality and the labour market: employers Julia Lane (NORC, Chicago) 10. Inequality and the labour market: unions Jelle Visser (UvA Amsterdam) and Daniele Checchi (Milan) 11. Low pay Claudio Lucifora (Milan) and Wiemer Salverda (UvA Amsterdam) 12. Gender and economic inequality Mary B. Gregory (Oxford)

Part 4 Dimensions of Inequality 13. Inequality, poverty and exclusion Brian Nolan (UCD Dublin) and Ive Marx (Antwerp) 14. Inequality and time use in the household Nancy Folbre (Massachusetts, Amherst) 15. Inequality and happiness Bernard van Praag (UvA Amsterdam) and Ada Ferrer-i-Carbonell (IAE Barcelona)

8 Sadly Andrew died in December 2007; the chapter was finished by Wendy Carlin (UCL) and Bob Rowthorn (Cambridge).


136 of 143

16. Health and economic inequality Andrew Leigh (ANU Canberra), Christopher Jencks (Harvard) and Timothy M. Smeeding (Syracuse) 17. Education and inequality Stephen Machin (UCL London)

Part 5 The Dynamics of Inequality 18. Demographic transformation and economic inequality Gary Burtless (Brookings) 19. Migration, ethnicity and economic inequality Klaus Zimmermann and Martin Kahanec (both IZA) 20. Intergenerational income mobility and the role of family background Anders Björklund (Stockholm) and Markus Jäntti (Åbo, LIS) 21. Intragenerational inequality and intertemporal mobility Richard V. Burkhauser (Cornell) and Kenneth A. Couch (Connecticut)

Part 6 Global Perspectives on Inequality 22. Inequality and economic growth Sarah Voitchovsky (Oxford) 23. Globalization and inequality Richard B. Freeman (Harvard, NBER and LSE) 24. Poverty and inequality: the global context Francisco H.G. Ferreira and Martin Ravallion (both World Bank)

Part 7 Changing Inequalities 25. Economic inequality and the welfare state Gøsta Esping-Andersen (Pompeu Fabra, Barcelona) and John Myles (Toronto) 26. The political economy of inequality and redistribution Nolan McCarty and Jonas Pontusson (both Princeton) 27. Prospects for achieving equality in market economies John E. Roemer (Yale)

Issues of scientific journals

Women and Work, Special issue of Oxford Economic Papers, 61:S1 Guest editors Mary Gregory, Miriam Beblo, Wiemer Salverda and Ioannis Theodossiou March 2009

Job Insecurity and Training, Special issue of Labour, Review of Labour Economics and Industrial Relations, 23:S1

Editors Antje Mertens, Thomas Zwick and Wiemer Salverda February 2009

Capitalism and Inequality, Issue of Oxford Review of Economic Policy, 25:1 Editor Ken Mayhew and Guest Editor Wiemer Salverda May 2009


137 of 143

LoWER3 Working papers

#9 Melanie K. Jones, Paul L. Latreille & Peter J. Sloane Crossing the Tracks? More on Trends in the Training of Male and Female Workers in Great Britain November 2004 #10 Simona Lup Tick and Ronald Oaxaca Technological Change and Gender Wage Differentials July 2005 #11 Maite Blázquez-Cuesta Earnings Mobility and Low-wage Employment in Spain: The Role of Job Mobility and Contractual Arrangements April 2006 #12 Julia Lane (NORC at University of Chicago) The Impact of Employers on the Outcomes of Low-wage Workers December 2006


138 of 143

Annex 4. Cumulative list of LoWER network events and publications since 1996

Events in chronological order during the phases corresponding with LoWER1, 2 and 3.

Phase 1 1996–1998: LoWER1 – 6+1 meetings Kick-off Meeting Paris, January–February 1996 1. Workshop Data on Low-wage Employment Oxford University, UK, July 1996 2. Conference Developments in Low-wage Employment Université Montesquieu, Bordeaux, France, January 1997 3. Workshop Analysis of Low-wage Employment University of Maastricht, the Netherlands, May 1997 4. Conference Analysis of Low-wage Employment Centre for Economic Performance, London School of Economics, London, UK, December 1997 5. Workshop Policies for Low-wage Employment and Social Exclusion Università Cattolica del Sacro Cuore, Milan, Italy, March 1998 6. Conference Policies for Low-wage Employment and Social Exclusion in Europe Rijksuniversiteit Groningen, the Netherlands, November 1998 Phase 2 2000–2004: LoWER2 – 9+1 meetings Kick off Meeting Paris, April 2000 7. Conference Role of Mobility for Low and High Earnings in the European Union and the United States University of Aberdeen, November 2000 8. Workshop Adapting Education and Training ESRI, Dublin, and ZEW, Mannheim, March and May 2001


139 of 143

9. Conference Combining Work, Home and Education Universidade do Minho, Braga, Portugal, October 2001. 10. Conference Adapting Education and Training for the Enhancement of Low-Skilled Jobs ETLA, Helsinki, May 2002 11. Workshop Job Quality and Employer Behaviour Università Cattolica, Milan, March 2003 12. Conference Consumption and Employment in the US and Europe: Can Product Demand Explain the Increase in the Jobs Gap between Europe and the US since the 1970s? Amsterdam Institute for Advanced Labour Studies AIAS, Universiteit van Amsterdam, April 2003 13. Workshop Employer Behaviour in the Low-wage Labour Market Université Montequieu, Bordeaux, November 2003 14. Conference LoWER Concluding Scientific Conference CEP/STICERD, London School of Economics, London, April 2004 15. Conference LoWER Dissemination Conference University of Antwerp, May 2004 Phase 3 2004–2008: LoWER3 – 12+1 meetings Kick off Meeting University of Tartu, Estonia, July 2004 16. Workshop Mobility in the Low-wage Labour Market CEP and CASE at the London School of Economics, February 2005 17. Conference Annual Conference 2005 ZEW, Mannheim, April 2005 18. Workshop Gender and Low-wage Employment Warsaw School of Economics, November 2005 19. Conference LoWER Annual Conference 2006 Århus School of Business, Denmark, April 2006


140 of 143

20. Workshop Earnings Mobility, Intergenerational Mobility and Low Pay Université de Savoie, Annecy, France, December 2006 21. Conference LoWER Annual Conference 2007 London, Centre for Economic Performance of the LSE, April 2007 22. Conference What Works for Women ? Volos, Greece, September 2007 23. Conference Economic Inequality Seville, Spain, September 2007 (in cooperation with EQUALSOC Network of Excellence) 24. Workshop Job Insecurity and Training Berlin School of Economics, March 2008 25. Workshop Low-wage Work in Europe – Changing the Debate ? Amsterdam Institute for Advanced Labour Studies, April 2008 (in cooperation with Russell Sage Foundation, New York) 26. Conference Institutions, Markets and European Unemployment Revisited: What Have We Learned? Amsterdam Institute for Advanced Labour Studies, Universiteit van Amsterdam, April 2008 27. Workshop Policy Dissemination European Commission DG’s ESA en Research, February 2009 (in cooperation with EQUALSOC Network of Excellence)

Publications in systematic order, indicating origin in LoWER1, 2 and 3 or related projects

A cumulative total of: - eight scientific book publications (## 1–8) - four special issues of scientific journals (## 9–12) - three special reports to the European Commission (## 13–14a/b) - two special dissemination books (##15–16) - eleven LoWER Working Papers

1. Low Pay and Earnings Mobility in Europe Editors Rita ASPLUND, Peter SLOANE and Ioannis THEODOSSIOU Edward Elgar, Cheltenham; 200 pages, July 1998 (LoWER1)


141 of 143

2. Low-Wage Employment in Europe Editors Stephen BAZEN, Mary GREGORY, Wiemer SALVERDA Edward Elgar, Cheltenham; 200 pages, December 1998 (LoWER1)

3. The Overeducated Worker? The Economics of Underutilization of Skills Editors Andries DE GRIP and Lex BORGHANS Edward Elgar, 260 pages, March 2000 (LoWER1)

4. Labour Market Inequalities: Problems and Policies of Low-Wage Employment in International Perspective

Editors Mary GREGORY, Wiemer SALVERDA, Stephen BAZEN Oxford University Press, 248 pages, August 2000 (LoWER1)

5. Policy Measures for Low-Wage Employment in Europe Editors Wiemer SALVERDA, Brian NOLAN and Claudio LUCIFORA Edward Elgar, 256 pages, November 2000 (LoWER1)

6. Job Quality and Employer Behaviour Editors Stephen BAZEN, Claudio LUCIFORA and Wiemer SALVERDA Palgrave, August 2005 (LoWER2)

7. Services and Employment: Explaining the US-European Gap Editors Mary GREGORY, Wiemer SALVERDA and Ronald SCHETTKAT Princeton University Press, 2007 (result of the DEMPATEM Research Project)

8. Oxford Handbook of Economic Inequality (LoWER3) Editors Wiemer SALVERDA, Brian NOLAN and Timothy Smeeding Oxford University Press, February 2009 (joint with EQUALSOC Network of Excellence)

9. Company Training and Services with a Focus on Low Skills Special issue of the International Journal of Manpower 25:1, 2004

Guest editors Rita ASPLUND and Wiemer SALVERDA (LoWER2)

10. Women and Work (LoWER3) Special issue of Oxford Economic Papers, 61:S1, 2009

Guest editors Mary GREGORY, Miriam BEBLO, Ioannis THEODOSSIOU, and Wiemer SALVERDA

11. Job Insecurity and Training (LoWER3) Special issue of Labour, Review of Labour Economics and Industrial Relations, 23:S1, 2009

Editors Antje MERTENS, Thomas ZWICK and Wiemer SALVERDA

12. Institutions, Politics and Unemployment (LoWER3) Issue of Oxford Review of Economic Policy, 25:1, 2009

Editor Ken MAYHEW and Guest Editor Wiemer SALVERDA

13. Statistical Data Available on Low-Wage Employment in The European Union and Its Member States

Special Report to European Commission LoWER/University of Groningen, April 1997 (LoWER1)


142 of 143

14a Benchmarking Low-Wage and High-Wage Employment in Europe and The United States

A Study of New European Datasets and National Data for France, Germany, the Netherlands, the United Kingdom and the United States

Wiemer SALVERDA, Brian NOLAN, Bertrand MAÎTRE and Peter MÜHLAU European Commission, DG Employment and Social Affairs, June 2001, 76 p. http://ec.europa.eu/employment_social/docs/study.pdf

14b The European-American Employment Gap, Wage Inequality, Earnings Mobility and Skill: A Study for France, Germany, The Netherlands, The United Kingdom and The United States

Final Report Wiemer SALVERDA, Mary GREGORY and Stephen BAZEN European Commission, DG Employment and Social Affairs, June 2001, 203 p.

15. Policies for Low-Wage Employment and Social Exclusion in Europe Editors Claudio LUCIFORA and Wiemer SALVERDA FrancoAngeli, Milano, 169 pages, October 1998 (LoWER1)

16. Low-Wage Employment in Europe: Perspectives for Improvement Editors Ive MARX and Wiemer SALVERDA ACCO, Leuven, February 2005 (LoWER2)

Working Papers (excluding 13 DEMPATEM Working Papers) 1. Wage Mobility within and between Jobs

Peter GOTTSCHALK, Boston College, April 2001 (LoWER2) 2. Skills, Wage Dispersion and Wage Mobility in the 1990s

Andries de GRIP and Geralt NEKKERS, ROA, University of Maastricht, April 2001 (LoWER2)

3. Youth and Earnings Mobility Stephen BAZEN, Université Montesquieu, Bordeaux, April 2001 (LoWER2)

4. Changing Status: Women’s Part-time Work and Wages in the United Kingdom Mary GREGORY, University of Oxford, and Sara CONNOLLY, University of East Anglia, April 2001 (LoWER2)

5. Labour Market Status and the Wage Position of the Low Skilled Peter MÜHLAU, Technical University Eindhoven (now University of Groningen), and Justine HORGAN, University of Groningen, July 2001 (LoWER2)

6. (missing) Measuring the Quality of Jobs Rannia LEONTARIDI, University of Stirling, and Peter SLOANE, University of Aberdeen, April 2001 (LoWER2)

7. Mobility and Earnings. An Analysis of Finnish Manufacturing and Service Rita ASPLUND, Research Institute of the Finnish Economy ETLA, April 2001 (LoWER2)


143 of 143

8. Crossing the Tracks? More on Trends in the Training of Male and Female Workers in Great Britain (LoWER3) Melanie K. JONES & Paul L. LATREILLE (Welmerc, Department of Economics, University of Wales Swansea) & Peter J. Sloane (Welmerc, Department of Economics, University of Wales Swansea & Iza, Bonn), November 2004

9. Technological Change and Gender Wage Differentials (LoWER3) Simona LUP TICK & Ronald L. OAXACA (Department of Economics, University of Mississippi, Oxford, MS), July 2005

10. Earnings Mobility and Low-wage Employment in Spain: The Role of Job Mobility and Contractual Arrangements (LoWER3) Maite BLÁZQUEZ CUESTA (Universidad Autónoma de Madrid), April 2006

11. The Impact of Employers on the Outcomes of Low-wage workers (LoWER3) Julia LANE (NORC/University of Chicago), December 2006

Documents

LoWER3 FinalReport FIN - archive.uva-aias.netarchive.uva-aias.net/uploaded_files/regular/LoWER3FinalReportFIN.pdf · Anu Laas and Kaia Philips at University of Tartu, Estonia 16