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Low-Wage Jobs: A Means For Employment Integration Of The Unemployed? Evidence From Administrative Data In Germany And Austria

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Executive Summary

Does the low wage sector serve as a stepping stone towards integration into better-paid jobs or at least towards integration of jobless people into employment? There is evidence for a "Low-wage trap" and for a high risk of low-wage earners to get unemployed, but this may also be due to sorting effects and not to low-wage work itself. The present paper contributes to this debate analyzing employment spells of male low-wage earners who had been unemployed before, with methods of continuous-time event history analysis. The present data have been retrieved from two large administrative micro-data sources: the IAB employment Sample (IABS) for Germany, and a combination of social security data from the Austrian Social Insurance Institutions.

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