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July 2006

Earnings mobility and low-wage workers in the United States

Brett Theodos, Robert W. Bednarzik

Data from the Panel Study of Income Dynamics indicate that persons initially with low income, but who work full time, remain in good health, and receive more education, exhibit upward earnings mobility. The picture is quite the opposite, however, for those who do not work or who start out at the lowest end of the income scale. In this article, annual employment and earnings figures for a low-income cohort of individuals from 1995 until 2001 are examined. Tracking the employment and earnings experience of the same individuals over time contributes to our understanding of the debate, showing that mobility varies across groups in important ways.

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