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by

Gregory Acs
The Urban Institute
2100 M Street NW
Washington, DC 20037

May 1999

References

Bishop, John. 1991. "Applying for Entitlements: Employers and the Targeted Jobs Tax Credit. Journal of Policy Analysis and Management. 10(Winter): 24-45.

Edin, Katherine and Laura Lein. 1997. Making Ends Meet: How Single Mothers Survive Welfare and Low-Wage Work. New York: The Russell Sage Foundation.

Levy, Frank. 1999. The New Dollars and Dreams: American Incomes and Economic Change. New York: The Russell Sage Foundation.

Pavetti, LaDonna and Gregory Acs. 1997. "Moving Up, Moving Out or Going Nowhere? A Study of the Employment Patterns of Young Women and the Implications for Welfare Mothers." Report to the Annie E. Casey Foundation. Washington, DC: The Urban Institute.

1. Author's tabulations from the 1990 and 1998 March Current Population Surveys (CPS).

2. For this computation, we divide total wage and salary income plus positive non-farm self-employment income by total hours worked.

3. This calculation relies on the strong assumption that the "exit rate" from low-wage status remains constant over time at 40 percent. Thus, the probability that a low-wage worker in one year remains a low-wage worker for the next three years is 0.6*0.6*0.6=0.22. This is likely an underestimate of low-wage persistence because the probability of exiting from low-wage status probably declines over time due to differences (in skill levels, for example) between workers who exit low-wage status in one year and those who are low-wage for multiple years.

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