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The Dynamics of Reservation Wages: Preliminary Evidence from the GSOEP

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  • Enswar Prasad

Abstract

This paper presents preliminary results from an empirical analysis of the individual and macroeconomic deter-minants of reservation wages, using data from the German Socio-Economic Panel. The longitudinal aspect of the dataset provides an interesting perspective on the dynamics of reservation wages and their correlations with accepted wage offers for workers who make the transition from unemployment to employment. The findings have important policy implications as well, since they shed some light on the disincentive effects of the German tax and transfer system for the labor supply and employment decisions of unemployed workers at different points of the skill/offer wage distribution.

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  • Enswar Prasad, 2001. "The Dynamics of Reservation Wages: Preliminary Evidence from the GSOEP," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 44-50.
    • Handle: RePEc:diw:diwvjh:70-10-7
    DOI: 10.3790/vjh.70.1.44
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    1. Kiefer, Nicholas M & Neumann, George R, 1979. "An Empirical Job-Search Model, with a Test of the Constant Reservation-Wage Hypothesis," Journal of Political Economy, University of Chicago Press, vol. 87(1), pages 89-107, February.
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    6. Stephen R. G. Jones, 1988. "The Relationship Between Unemployment Spells and Reservation Wages as a Test of Search Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(4), pages 741-765.
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    Cited by:

    1. Stephan Humpert & Christian Pfeifer, 2013. "Explaining age and gender differences in employment rates: a labor supply-side perspective [Eine Erklärung alters- und geschlechtsspezifischer Unterschiede in den Beschäftigungsquoten: Die Sicht de," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 46(1), pages 1-17, March.
    2. Khurshid Alam & Sakiba Tasneem & Molla Huq, 2014. "Reservation wage of female volunteer community health workers in Dhaka urban slums: a bidding game approach," Health Economics Review, Springer, vol. 4(1), pages 1-10, December.
    3. Christensen, Björn, 2003. "Die Validität erfragter Reservationslöhne: ein Test auf Basis der stationären Suchtheorie," Kiel Working Papers 1151, Kiel Institute for the World Economy (IfW Kiel).
    4. Christensen, Björn, 2003. "Anspruchslohn und Arbeitslosigkeit in Deutschland (Reservation wage and unemployment in Germany)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 573-598.
    5. Tereza Kochovska, 2020. "Interplay Between Reservation Wage and Unemployment Duration: Evidence from Jordan, Serbia, Montenegro, Ukraine and Moldova in 2015," Business and Economic Research, Macrothink Institute, vol. 10(1), pages 120-132, March.
    6. Christensen, Björn, 2002. "Reservation wages, offered wages, and unemployment duration: new empirical evidence," Kiel Working Papers 1095, Kiel Institute for the World Economy (IfW Kiel).
    7. Christensen, Björn, 2003. "Selektionsverzerrungen, erfragte Reservationslöhne und Arbeitslosigkeitsdauer," Kiel Working Papers 1162, Kiel Institute for the World Economy (IfW Kiel).
    8. Christensen, Björn, 2003. "Anspruchslohn und Arbeitslosigkeit in Deutschland (Reservation wage and unemployment in Germany)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 36(4), pages 573-598.
    9. Christensen, Björn, 2001. "Mismatch-Arbeitslosigkeit unter Geringqualifizierten (Mismatch-unemployment among the low-skilled)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 34(4), pages 506-514.
    10. Christensen, Björn, 2001. "Mismatch-Arbeitslosigkeit unter Geringqualifizierten (Mismatch-unemployment among the low-skilled)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 34(4), pages 506-514.

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