Moving Up or Moving On

Moving Up or Moving On: Who Gets Ahead in the Low-Wage Labor Market?

Fredrik Andersson
Harry J. Holzer
Julia I. Lane
Copyright Date: 2005
Published by: Russell Sage Foundation
Pages: 192
https://www.jstor.org/stable/10.7758/9781610440103
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  • Book Info
    Moving Up or Moving On
    Book Description:

    Moving Up or Moving On, Fredrik Andersson, Harry Holzer, and Julia Lane examine the characteristics of both employees and employers that lead to positive outcomes for workers. Using new Census data, Moving Up or Moving On follows a group of low earners over a nine-year period to analyze the behaviors and characteristics of individuals and employers that lead workers to successful career outcomes. The authors find that, in general, workers who “moved on” to different employers fared better than those who tried to “move up” within the same firm. While changing employers meant losing valuable job tenure and spending more time out of work than those who stayed put, workers who left their jobs in search of better opportunity elsewhere ended up with significantly higher earnings in the long term—in large part because they were able to find employers that paid better wages and offered more possibilities for promotion. Yet moving on to better jobs is difficult for many of the working poor because they lack access to good-paying firms. Andersson, Holzer, and Lane demonstrate that low-wage workers tend to live far from good paying employers, making an improved transportation infrastructure a vital component of any public policy to improve job prospects for the poor. Labor market intermediaries can also help improve access to good employers. The authors find that one such intermediary, temporary help agencies, improved long-term outcomes for low-wage earners by giving them exposure to better-paying firms and therefore the opportunity to obtain better jobs. Taken together, these findings suggest that public policy can best serve the working poor by expanding their access to good employers, assisting them with job training and placement, and helping them to prepare for careers that combine both mobility and job retention strategies. Moving Up or Moving On offers a compelling argument about how low-wage workers can achieve upward mobility, and how public policy can facilitate the process. Clearly written and based on an abundance of new data, this book provides concrete, practical answers to the large questions surrounding the low-wage labor market.

    eISBN: 978-1-61044-010-3
    Subjects: Business, Economics, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. About the Authors
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
  5. Chapter One Introduction: Advancement and the Low-Wage Labor Market
    (pp. 1-13)

    With the passage of federal welfare reform legislation in 1996 and its subsequent implementation around the country, a lot more attention has been focused on the low-wage labor market. The focus of the old system on income maintenance has been replaced by a new emphasis on the temporary nature of cash assistance and the centrality of work.¹ Publicly funded education and training have also received less emphasis in this environment, relative to “work-first‰ approaches. As a result, the welfare caseload of poor single women with children has fallen dramatically, and their participation in the workforce has risen as well (see...

  6. Chapter Two The Longitudinal Employer-Household Dynamics(LEHD)Program Data
    (pp. 14-23)

    Most empirical analyses of the low-wage labor market have been constrained by the types of data usually available. Clearly, analysis of worker-based surveys results in greater in-depth understanding about the relationship between worker characteristics and labor market outcomes, and analysis of employer-based surveys results in similar understandings of the employer side of the market. But neither analysis alone gives us much insight into the interactions between the two sides of the labor market. In addition, since many surveys either are only cross-sectional in nature or have a relatively short time span for follow-up, their usefulness for helping us understand the...

  7. Chapter Three Who Are the Low Earners and What Are Their Jobs?
    (pp. 24-46)

    As we noted earlier, our goal in this volume is to follow a set of low earners over time in the labor market and look at how their earnings evolve as they interact with various employers. The LEHD data that we described in the previous chapter are uniquely well suited to this purpose. They enable us to look at both low earners and the firms for which they work; moreover, the samples are large enough that we can look at many demographic subgroups, and with many years of data we can also analyze dynamics over time.

    Before we proceed with...

  8. Chapter Four Transitions Out of Low Earnings: Who, When, and Where?
    (pp. 47-77)

    In the previous chapter, we showed that persistently low earners tend to be concentrated not only in certain demographic groups but also in certain kinds of firms. The results suggested that uneven access across groups to employment in high-wage sectors and firms contributes to the consistently low earnings of many workers in the labor market. In this chapter, we focus ontransitionsout of low-earnings status for those workers who earned less than $12,000 per year for at least a three-year period.

    A number of important questions arise in such an analysis. For instance, are transitions out of low earnings...

  9. Chapter Five Moving Up or On: The Role of Job Mobility in Raising Earnings
    (pp. 78-104)

    The evidence in the previous chapter confirms that the characteristics of the firms for which they work, and especially the wage premia paid by those firms, have important effects on the likelihood that low earners will advance in the labor market. The evidence in chapter 4 also shows that the characteristics of the employers for whom initial low earners worked improved over time, thereby contributing to their improved earnings.

    These findings raise broader questions about whether low earners succeed more frequently in the labor market through jobretentionor jobmobility. Job retention is staying in the same initial job...

  10. Chapter Six Firms That Hire and Advance Low Earners: A Closer Look
    (pp. 105-121)
    Erika McEntarfer

    The preceding chapters have demonstrated that finding the “right” firm can make the difference in a low-wage worker’s success or failure in escaping low-wage work. But a major question remains: how can these firms be identified? The evidence presented in the previous chapters provides some guidance: certain firm characteristics, such as industry, firm size, and turnover rate, are all-important indicators of whether a firm provides a pathway to success for low earners. Yet the most important characteristic contributing to a worker’s success is the firm’s wage premium, or “fixed effect,” which is unobservable to local practitioners. Are there other indicators...

  11. Chapter Seven Where Are the Good Jobs? The Role of Local Geography
    (pp. 122-141)
    Simon Burgess

    Several key themes have emerged from the earlier chapters. Low-wage workers are highly concentrated in particular types of firms and industries. Different demographic groups have differential access to firms that pay high wages, and this has important consequences for their ability to exit low-wage work. But what determines differential access? One possibility is that low-earning workers live farther away from where the high-wage jobs are located and have difficulty reaching them.

    Once again, this is a possibility we can examine because of the richness of the LEHD data, which includes information on where workers live and work. We carry out...

  12. Chapter Eight Conclusions and Policy Implications
    (pp. 142-150)

    To what extent do workers with persistently low earnings advance in the labor market over longer periods of time, and how do they do so? At the outset of this volume, we indicated that economists and other social scientists have had few answers to these questions to date. The role of these workers’ access to and employment with high-wage firms, as opposed to their own skills and behavior, has also received only modest attention in previous empirical work on low-wage labor markets. Whether these workers do better by engaging in job retention or in job mobility—staying on their jobs...

  13. Notes
    (pp. 151-166)
  14. References
    (pp. 167-174)
  15. Index
    (pp. 175-180)