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When is it possible to escape from low-wage jobs? The role of co-worker networks.

Authors: Zoltán Elekes*, ANET Lab & Umea University, Anna Baranowska-Rataj, Umea University, Rikard Eriksson, Umea University
Topics: Economic Geography
Keywords: low-wage workers, wage mobility, co-worker networks
Session Type: Paper
Presentation File: No File Uploaded


Low-wage jobs constitute a substantial proportion of jobs created on the European labour markets. While these jobs broaden opportunities for paid work, they differ in terms of rewards to skills and opportunities for accumulating human and social capital. Hence, from a life course perspective, starting a working career with a low-wage job may be a dead-end. While previous research documented the characteristics of workers entrapped in low-wage employment, much less is known about the possible mechanisms facilitating transitions to better-paid jobs. Specifically, we know too little about the role that co-worker networks may play in upward wage mobility. This paper aims at filling this gap by using Swedish register data that provide detailed information on individual characteristics including wages, and link employees with employer data on a yearly basis for the period 1990-2015. We infer co-worker networks using a recently developed method inspired by the literature on social homophily. By means of hazard models we assess whether workers who started their career with low-wage jobs were more likely to find better-paid jobs if their co-worker networks included well-educated peers. Our preliminary results indicate that industrial and spatial characteristics of the co-worker networks indeed play a role in upward wage mobility.

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