Persistence of Low Pay Employment

16 March 2018, 2-3pm

Author: Alexander Plum and Gail Pacheco

Several studies have shown that working in the low wage sector significantly increases the risk of staying low paid employed in the future. However, the past literature has only considered changes in labour market status at the annual level and has not accounted for within-year changes of an individual’s labour market position.

Using a large administrative data-set with monthly earnings information, this study shows that state dependence in low pay employment is highly heterogeneous: workers with a strong attachment to the low pay sector have a significantly higher probability of staying low-paid employed compared to their low paid colleagues with a weak low pay attachment. Moreover, evidence is presented that the conventional identification strategy using annual data both under- and overestimates the persistence in low pay substantially.

Copy of presentation

See poster here


AUT City Campus
42 Wakefield Street,

About the presenter

Ryan Greenaway-McGrevy joined the department of Economics at the University of Auckland in July 2014. Prior to this he was a Research Economist in the Office of the Chief Statistician at the Bureau of Economic Analysis (BEA) in Washington DC. Ryan is the Director of the Centre for Applied Research in Economics at the University of Auckland.

See poster here