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The Relation between Unemployment Benefits, the Reservation Wage and Search Duration

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  • Gorter, Dirk
  • Gorter, Cees
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    Abstract

    Stationary job search theory is used as a starting point for an empirical analysis of search durations. Data have been derived from the Dutch Socio-economic Panel and cover the period 1985-87. They are particularly interesting since the reservation wage and the conditional expected wage are observed. This makes it possible to analyze the relation between unemployment benefit, reservation wage, and search duration. It appears that other factors, such as gender and educational level, influence duration far more than the benefit and the reservation wage. A close connection is found between benefit and reservation wage (elasticity of 0.3). Copyright 1993 by Blackwell Publishing Ltd

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    Bibliographic Info

    Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics & Statistics.

    Volume (Year): 55 (1993)
    Issue (Month): 2 (May)
    Pages: 199-214

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    Handle: RePEc:bla:obuest:v:55:y:1993:i:2:p:199-214

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    Cited by:
    1. William Collier, 2003. "The Impact of Demographic and Individual Heterogeneity on Unemployment Duration: A Regional Study," ERSA conference papers ersa03p496, European Regional Science Association.
    2. Addison, John T. & Centeno, Mario & Portugal, Pedro, 2004. "Reservation Wages, Search Duration, and Accepted Wages in Europe," IZA Discussion Papers 1252, Institute for the Study of Labor (IZA).
    3. Sarah Brown & Karl Taylor, 2008. "Reservation Wages, Expected Wages and Labour Market Outcomes: Analysis of Individual Level Panel Data," Working Papers 2008008, The University of Sheffield, Department of Economics, revised Jul 2008.
    4. Prasad, Eswar, 2003. "What Determines the Reservation Wages of Unemployed Workers? New Evidence from German Micro Data," IZA Discussion Papers 694, Institute for the Study of Labor (IZA).
    5. Graafland, Johan J. & de Mooij, Ruud A., 1999. "Fiscal policy and the labour market: An AGE analysis," Economic Modelling, Elsevier, vol. 16(2), pages 189-219, April.
    6. De Coen, An & Forrier, Anneleen & Sels, Luc, 2010. "The impact of age on the reservation wage: the role of employability," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/387685, Katholieke Universiteit Leuven.
    7. Brown, Sarah & Taylor, Karl, 2011. "Reservation wages, market wages and unemployment: Analysis of individual level panel data," Economic Modelling, Elsevier, vol. 28(3), pages 1317-1327, May.

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