Do Scarring Effects of Low-Wage Employment and Non-Employment Differ BETWEEN Levels of Qualification?
Article first published online: 6 MAR 2014
© 2014 Scottish Economic Society
Scottish Journal of Political Economy
Volume 61, Issue 2, pages 154–177, May 2014
How to Cite
Mosthaf, A. (2014), Do Scarring Effects of Low-Wage Employment and Non-Employment Differ BETWEEN Levels of Qualification?. Scottish Journal of Political Economy, 61: 154–177. doi: 10.1111/sjpe.12039
- Issue published online: 8 APR 2014
- Article first published online: 6 MAR 2014
- Manuscript Received: 15 APR 2013
- University of Erlangen-Nuremberg
This study investigates how the effects of low-wage employment and non-employment on wage prospects vary depending on qualification. Based on theories on signalling effects, human capital and job search, we discuss why there may be heterogeneity in state dependence in both labour market states. We find that episodes of low-wage employment incur a significantly lower risk of future non-employment than episodes of non-employment for low-qualified workers. In contrast, for workers with a middle or high level of qualification the risk of non-employment is not significantly different when being low-paid instead of not employed.