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Low-Wage Employment Versus Unemployment: Which One Provides Better Prospects For Women?

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Executive Summary

This paper analyzes state dependence in low-wage employment of western German women using GSOEP data, 2000-2006. The authors estimate dynamic multinomial logit models with random effects and find that having a low-wage job increases the probability of being low-paid and decreases the chances of being high-paid in the future, in particular for low-paid women working part-time. However, concerning future wage prospects low-paid women are clearly better o than unemployed or inactive women. They argue that for women low-wage jobs can serve as stepping stones out of unemployment and are to be preferred to staying unemployed and waiting for a better job.

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