Escaping Low Earnings: The Role of Employer Characteristics and Changes

Abstract

Using a unique dataset based on individual Unemployment Insurance wage records for Illinois in the 1990s that are matched to other Census data, the authors analyze the extent to which escape from or entry into low earnings among adult workers was associated with changes in their employers and firm characteristics. The results show considerable mobility into and out of low earnings status, even for adults. They indicate that job changes were an important part of the process by which workers escaped or entered low-wage status, and that changes in employer characteristics help to account for these job changes. Matches between personal and firm characteristics also contributed to observed earnings outcomes.