An analysis of the characteristics influencing low-wage earners mobility in Malta

Abstract

This study attempts to identify the characteristics that influence mobility of individual workers out of the low-wage bracket during a period of economic growth. It exploits a sample of individuals from the European Statistics on Income and Living Conditions (EU-SILC) survey, carried out by the National Statistics Office (NSO) that are followed over four consecutive years: between 2016 and 2019. Workers are considered as low-wage earners if their wage is within the 25th percentile of the earnings distribution. This is estimated at €13,800 per annum for 2016 and it increases in line with the inflation rate to €14,385 for 2019. During this studied period, 11.24% of individuals classified as low-wage earners, are mobilised out of low-wage. Two binary choice models, the linear probability model and logit model, are used to study the probability of an individual being mobile. The independent variable, which represents mobility, is regressed on several individual and industry characteristics. On average, the most influential characteristics in mobility out of low-wage are the individual’s health status, level of education attainment and marital status. In addition, the probability of an individual being mobile out of low-wage is higher in specific employment sectors, such as retail, professional services and public administration. These findings derived from the analysis of the characteristics of such low-wage earners makes possible the adoption of appropriate policies that could be implemented to specific groups of individuals. Consequently, this might also prompt further research and understanding on low-wage earners mobility in Malta.