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Mind the Gap

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  • Paul Gregg
  • Jonathan Wadsworth
Abstract
Britain, perhaps uniquely, has experienced simultaneoud rises in both wage inequality and polarisation of eployment across households over the past twenty years. This article investigates the inter-relations of these two trends by examining the changing nature of new jobs and the characteristics of the individuals who fill them. One of the principal reasons why new jobs are increasingly taken by individuals with partners in work is the low wages associated with these jobs. Using a simple matching framework, a rising share of bad, low quality, jobs in the stock of entry jobs can be shown to be consistent with a positive labour supply shock, rising separation rates, cost or productivity shocks, all of which have hit Britain, to some degree, over the past fifteen years. Using household survey data, the paper shows that real entry wages have fallen relative to the wages of those in other jobs. Entry jobs are dominated by high turnover forms of employment, part-time, temporary working and self-employment. Low wage/high turnover forms of working are less likely to be filled by those from workless households. Rising wage inequality re-enforces employment polarisation.

Suggested Citation

  • Paul Gregg & Jonathan Wadsworth, 1996. "Mind the Gap," CEP Discussion Papers dp0303, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0303
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    Citations

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    Cited by:

    1. Manning, Alan, 1999. "Pretty vacant: recruitment in low wage labour markets," LSE Research Online Documents on Economics 20231, London School of Economics and Political Science, LSE Library.
    2. Lehmann, Hartmut & Wadsworth, Jonathan, 1997. "New jobs, worklessness and households in Poland," European Economic Review, Elsevier, vol. 41(3-5), pages 915-923, April.
    3. Alan Manning & Helen Robinson, 2004. "Something in the way she moves: a fresh look at an old gap," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 169-188, April.
    4. Francis Green & Andrew Dickerson & Alan Carruth & David Campbell, 2001. "An Analysis of Subjective Views of Job Insecurity," Studies in Economics 0108, School of Economics, University of Kent.
    5. Machin, Stephen, 1997. "The decline of labour market institutions and the rise in wage inequality in Britain," European Economic Review, Elsevier, vol. 41(3-5), pages 647-657, April.
    6. Arulampalam, Wiji, 2001. "Is Unemployment Really Scarring? Effects of Unemployment Experiences on Wages," Economic Journal, Royal Economic Society, vol. 111(475), pages 585-606, November.
    7. Stephen Nickell & Patricia Jones & Glenda Quintini, 2002. "A Picture of Job Insecurity Facing British Men," Economic Journal, Royal Economic Society, vol. 112(476), pages 1-27, January.
    8. Santos, Miguel, 2010. "From Training to Labour Market. Holocletic Model," MPRA Paper 26617, University Library of Munich, Germany.
    9. Sophie Ponthieux & Pierre Concialdi, 2000. "Low pay and poor workers: a comparative study of France and the United States," Transfer: European Review of Labour and Research, , vol. 6(4), pages 650-672, November.
    10. Konstantinos Pouliakas & Ioannis Theodossiou, 2010. "Measuring the Utility Cost of Temporary Employment Contracts Before Adaptation: A Conjoint Analysis Approach," Economica, London School of Economics and Political Science, vol. 77(308), pages 688-709, October.
    11. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data.
    12. Lehmann, Hartmut & Wadsworth, Jonathan & Acquisti, Alessandro, 1999. "Grime and Punishment: Job Insecurity and Wage Arrears in the Russian Federation," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 595-617, December.
    13. J. R. Shackleton, 1997. "Skills and Unemployment," Local Economy, London South Bank University, vol. 11(4), pages 299-316, February.
    14. David Campbell & Alan Carruth & Andrew Dickerson & Francis Green, 2007. "Job insecurity and wages," Economic Journal, Royal Economic Society, vol. 117(518), pages 544-566, March.

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