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Escaping from Low-Wage Employment: The Role of Co-worker Networks – by Zoltán Elekes and co-authors

 

Escaping from Low-Wage Employment:
The Role of Co-worker Networks

Research in Social Stratification and Mobility
Available online 25 November 2022, In Press, Journal Pre-proof

Abstract

Low-wage jobs are often regarded as dead ends in the labour market careers of young people. Previous research focused on disentangling to what degree the association between a low-wage job at the start of working life and limited chances of transitioning to better-paid employment is causal or spurious. Less attention has been paid to the factors that may facilitate the upward wage mobility of low-wage workers. We focus on such mechanisms, and we scrutinize the impact of social ties to higher-educated co-workers. Due to knowledge spillovers, job referrals, as well as firm-level productivity gains, having higher-educated co-workers may improve an individual’s chances of transitioning to a better-paid job. We use linked employer-employee data from longitudinal Swedish registers and panel data models that incorporate measures of low-wage workers’ social ties to higher-educated co-workers. Our results confirm that having social ties to higher-educated co-workers increases individual chances of transitioning to better-paid employment.

Keywords: co-worker networks, employer-employee data, low-wage, wage mobility

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