Low-paid work can prove to be a stepping stone to better things, but equally, it can be a trap that is difficult to get out from. Research from Umeå University suggests that a successful transition into better-paid work depends on the social connections one has.

“In our paper, we wanted to identify workplace-specific social environments that foster transitions from low-wage to better-paid employment,” the researchers explain. “Therefore, we examined what effect social ties to higher educated co-workers had on the upward pay mobility for workers who started their careers in low-earnings jobs.”

Moving up

The researchers analyzed employer-employee data gathered from Swedish registers. The dataset combined income tax, education, and social security data. By using the identity numbers of individuals and organizations, the researchers were able to match up people with their employers across each of the registers.

They then used an innovative method to predict the social ties among employees at the same firm, which allowed them to estimate the number of connections low-wage workers had within their organization. This analysis of people’s social graph then allowed the researchers to explore whether connections with higher-educated colleagues helped the career progression of lower-paid workers.

“Our analysis shows that the likelihood of moving to a better-paid job within a year is higher among the low-wage workers with a higher number of social ties to higher educated workers,” the researchers explain.

“We could imagine a survey interviewer at a market research company—a typical low-wage job. Even though his/her duties are relatively simple, she/he might interact with other workers at the firm quite often, especially with people who design market research surveys. This is because market research companies train interviewers basically each time they start a new survey. This interaction could potentially lead to learning processes that subsequently facilitate an upward career move.”

Social ties

The results show that social links with higher-educated colleagues do indeed appear to increase the career prospects of lower-paid workers as they provide a gateway into better-paid roles.

“A workplace with more opportunities for forming social ties to higher-educated co-workers raises the likelihood of upward wage mobility,” the researchers conclude. “These effects do not vanish even after we controlled for unobserved differences between workers. Hence, the degree to which a low-wage job becomes a ‘stepping-stone’ or a ‘dead-end’ for a young worker, depends on the skill composition at the firm where this job is located, and the opportunities to establish social ties with higher educated co-workers.”