The Economics of Low Pay in Britain

Abstract

Examines the extent of low pay in Britain, first by estimating a Lorenz curve and, second, by using a logistic regression approach. Low pay is defined in terms of the first three deciles of the income distribution for all workers. The data are taken from the 1986 Social and Economic Life Survey of 6,110 individuals in six local labour markets using a matched employer‐employee sample. Gender is the most important variable but women, as men, can improve their relative positions by acquiring human capital. Variables inducing upward mobility are much the same – regardless of position in the wage structure.