Characteristics of Low-Wage Workers and Their Labor Market Experiences: Evidence from the Mid- to Late 1990s. Employment Rates Over Time

04/30/2004

Overall quarterly employment rates after the start of the workers' initial low-wage jobs remained high throughout the follow-up period (Figures IV.4 and IV.5). The rates remained fairly constant at about 85 percent per quarter for males and 80 percent per quarter for females. The strong economy during the mid- to late 1990s probably had an influence on these high labor force participation rates. Nonetheless, the notion that low-wage workers tend to have long spells of unemployment is not supported by the data for either males or females.

Figure IV.4.
Quarterly Employment Rates Of Male Workers Who Initially
Started Low-Wage Jobs, By Wage Type
 
Figure Iv.4. Quarterly Employment Rates Of Male Workers Who Initially Started Low-Wage Jobs, By Wage Type
Source: 1996 SIPP longitudinal files using workers who started low-wage jobs within six months after the start of the panel period
Note: All figures were calculated using the longitudinal panel weight and pertain to a 42-month follow-up period.

Figure IV.5.
Quarterly Employment Rates Of Female Workers Who Initially
Started Low-Wage Jobs, By Wage Type
 
Figure Iv.5. Quarterly Employment Rates Of Female Workers Who Initially Started Low-Wage Jobs, By Wage Type
Source: 1996 SIPP longitudinal files using workers who started low-wage jobs within six months after the start of the panel period
Note: All figures were calculated using the longitudinal panel weight and pertain to a 42-month follow-up period.

The percentage of workers employed in low-wage jobs decreased over time, whereas employment rates in medium-wage jobs increased, which led to quarterly employment rates in all jobs that remained fairly constant (Figures IV.4 and IV.5). For males, the quarterly employment rate in low-wage jobs decreased from 74 percent in quarter 4 after job start, to 53 percent in quarter 8, to 45 percent in quarter 13. Conversely, the participation rate in medium-wage jobs increased from 12 percent in quarter 4, to 30 percent in quarter 8, then leveled off to about 40 percent for the rest of the follow-up period. By the end of the panel period, a similar percentage of males were employed in low-wage and medium-wage jobs.

The same general pattern holds for females, although females experienced less successful outcomes than males: females experienced slower decreases in the low-wage employment rate over time and smaller increases in the medium-wage employment rate. By the end of the follow-up period, there were still about twice as many females in low- than medium-wage jobs.

Employment rates in high-wage jobs were very low throughout the follow-up period for both sexes. Starting in quarter 10, they were about 5 percent per quarter for males and 2 percent per quarter for females.

In sum, our results strongly suggest that low-wage workers have some upward mobility over the medium term. These workers tend to bounce in and out of the low-wage labor market, but on average, are more likely to hold higher-paying jobs over time; this is especially true for males. Not surprisingly, wage increases are not large; low-wage workers increasingly enter the medium-wage sector, but few enter the high-wage sector (as found also in Carnevale and Rose 2001; and Gottschalk 1997).

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