The low pay, no-pay cycle

Spencer Thompson
20th Jan 2015

This research assesses the scale of the ‘low-pay, no-pay’ phenomenon.

Low pay is endemic in the UK labour market. While the issue has recently moved to the forefront of the public debate on employment and job quality, it is a longstanding feature of the UK economy. More than one in five workers in the UK experience low pay, a proportion that has changed little in more than 25 years.

This research:

  • assesses the scale of the ‘low-pay, no-pay’ phenomenon, whereby people cycle between periods of low pay and worklessness. Being low paid increases the probability of periods of worklessness by around 10 per cent, after accounting for a host of individual, family and employment characteristics;
  • finds that more than a third of low-paid workers (38.4 per cent) experience a period of worklessness over a four-year period, and provides new evidence on the risk of job loss among low-paid workers in the UK;
  • calculates the relationship between a host of individual and job-related factors and the risk of job loss.


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