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Moving Up or Moving On

Who Advances in the Low-Wage Labor Market?

Fredrik Andersson, Harry J. Holzer, Julia I. Lane

Publication Year: 2006

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.

Published by: Russell Sage Foundation

Title Page

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pp. vii-viii

About the Authors

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pp. ix-x

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pp. xi-xii

We have received important financial support during this project from the Employment and Training Administration (ETA) of the U.S. Department of Labor, the assistant secretary for policy and evaluation at the U.S. Department of Health and Human Services, the Rockefeller Foundation, and the Russell Sage Foundation. We would like to thank John Abowd, John Haltiwanger, and other members of the LEHD research and support...

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Chapter One: Introduction: Advancement and the Low-Wage Labor Market

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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...

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Chapter Two: The Longitudinal Employer-Household Dynamics (LEHD) Program Data

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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...

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Chapter Three: Who Are the Low Earners and What Are Their Jobs?

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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...

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Chapter Four: Transitions Out of Low Earnings: Who, When, and Where?

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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 on transitions out of low-earnings status for those workers

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Chapter Five: Moving Up or On: The Role of Job Mobility in Raising Earnings

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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...

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Chapter Six: Firms That Hire and Advance Low Earners: A Closer Look

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pp. 105-121

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...

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Chapter Seven: Where Are the Good Jobs? The Role of Local Geography

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pp. 122-141

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...

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Chapter Eight: Conclusions and Policy Implications

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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...


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pp. 151-166


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pp. 167-174


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pp. 175-179

E-ISBN-13: 9781610440097
Print-ISBN-13: 9780871540560
Print-ISBN-10: 0871540568

Page Count: 192
Publication Year: 2006