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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," Studies in Economics 0302, Department of Economics, University of Kent.
    2. John T. Addison & Mário Centeno & Pedro Portugal, 2004. "Reservation Wages, Search Duration, and Accepted Wages in Europe," Working Papers w200413, Banco de Portugal, Economics and Research Department.
    3. Eswar Prasad, 2003. "What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data," IMF Working Papers 03/4, International Monetary Fund.
    4. 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.
    5. 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.
    6. 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.

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