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Low-wage employment in Europe: a review of the evidence

Lucifora, Claudio, McKnight, Abigail and Salverda, Weimer (2005) Low-wage employment in Europe: a review of the evidence. Socio-Economic Review, 3 (2). pp. 259-292. ISSN 1475-1461

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Identification Number: 10.1093/SER/mwi011


In this study, we review the patterns of low pay in Europe. We first describe the evolution of aggregate low-wage employment and the incidence of low pay among several groups of workers, then we look at the compositional changes that occurred in recent decades. Given the prevalence of wage regulation and collective bargaining in most European countries, we also analyse the role of labour market institutions on low pay. We show that minimum wages and union presence do play a relevant role in reducing wage inequalities. Finally, we investigate low pay in the long run and the evolution of earnings over the life-cycle. We show that earnings mobility has an equalizing effect over the long-run but its impact is small over 6/7 years. Empirical evidence from a number of OECD countries confirms that earnings inequality between individuals is lower when earnings are pooled over a number of years but, for Britain at least, the extent to which mobility reduces inequality has fallen over time suggesting a fall in mobility and an increase in long run inequality.

Item Type: Article
Official URL:
Additional Information: © 2005 Oxford University Press and The Society for the Advancement of Socio-Economics
Divisions: Centre for Analysis of Social Exclusion
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
P - Economic Systems > P5 - Comparative Economic Systems > P51 - Comparative Analysis of Economic Systems
Date Deposited: 11 Jun 2012 12:42
Last Modified: 14 Jul 2024 23:21

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