Overall, just over 20 percent of workers who had been on TANF in 1999 and just under 10 percent of low-wage workers fully exited into higher wage work by the 2000-2001 period (earning above $15,000 in both years). Rates were noticeably higher, however, for low-wage workers in certain industries and for those working alongside higher-wage coworkers. For example, as shown in the graphs below, among those receiving TANF in 1999, 33 percent of those in special trade construction industries and 46 percent of those in firms with few (<20 percent) of low-wage co-workers entered higher wage status by the 2000-2001 period (according to the industry and the concentration of low-wage workers where they worked in 1999).
Multivariate analysis confirms that these and other factors had a significant effect on likelihood of exiting into higher wage status when controlling for a number of firm and worker characteristics. For example:
- Working in a firm larger than 25 employees raised the chances about 3 percentage points.
- Working in a primarily low-wage neighborhood lowered the chances nearly 4 points.
- In downsizing firms, chances fell by 4 points for every 1% of contraction in the firm.
- Working for a firm paying a “wage premium” raised the changes by about 18 points.(2)