Earnings Mobility and Economic Growth.

by John McCall

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A modified Markov analysis of movement into and out of low earnings by workers aged 25 to 55 during 1957-1966. Based on the Social Security 1% Continuous Work History Sample, yearly transition probabilities were calculated for individual 10-year earning profiles and also horizontally by age group. Alternative low-earning standards were $1500, $3000, and $4500 per year. A significant number of employed persons remained poor regardless of economic growth; chances were similar for nonwhite males and white females, highest for nonwhite females. White males were most likely to stay out of poverty. Excluding those that remain both in poverty and out of poverty, GNP increase led to upward movement--more for nonwhite males than for white males. Movement into covered employment was more closely related to percentage increases in GNP for females than males. The proportion of female earners who are out of the poverty level was significantly higher for whites, except for the 25-34 age group.

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