Abstract

This article focuses on the significance of low pay, investigating: who is low paid and why, and who is low paying and why? This elaborates on two important aspects: the determinants of being paid a wage towards the bottom of the earnings distribution, and the individual chances of remaining in the lower part, moving into or out of it, and up or down the distribution. Section 2 discusses the economic analysis of low pay. Section 3 presents definitions, measurement, and data issues. In Section 4, some stylized facts on low pay are presented and the main results from the empirical literature are critically reviewed. Section 5 contains a discussion of policy issues and suggestions for future research.