Low Wage Mobility in Denmark, Germany and the United States

In this working paper, mobility out of low wage employment in Denmark, Germany, and the United States is studied. Data used for the analysis are the Danish Longitudinal Database – a representative sample of the Danish population, and the PSID-GSOEP Equivalent File Data.
Mobility is analysed as the transition out of low wage in 1993 and 1995 respectively, conditional on low wage in 1992. The econometric model takes selection into low wage in 1992 into account, and results clearly state the importance.
At the aggregate level, mobility patterns are similar in Denmark and Germany, while mobility in the United States is more sensitive to the time period. At the micro level, effects of the explanatory variables are similar across the three countries, especially for the one-year period.