Reservation wages, market wages and unemployment: Analysis of individual level panel data
AbstractUsing individual level panel data, we analyse the divergence between the reservation wages of individuals who are out of work and their predicted market wages, focusing upon identifying the factors that influence the potential divergence. In addition, using propensity score matching techniques, we explore the implications of such divergences for future employment and wages. Our findings suggest that having reservation wages that are high relative to the predicted market wage influence both future employment and future wages.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 28 (2011)
Issue (Month): 3 (May)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411
Expected wages Reservation wages Unemployment;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877.
- Frijters, Paul & van der Klaauw, Bas, 2003.
"Job Search with Nonparticipation,"
CEPR Discussion Papers
3922, C.E.P.R. Discussion Papers.
- Paul Frijters & Bas van der Klaauw, 2003. "Job Search with Nonparticipation," School of Economics and Finance Discussion Papers and Working Papers Series 168d, School of Economics and Finance, Queensland University of Technology.
- Paul Frijters & Bas van der Klaau, 2003. "Job Search with Nonparticipation," Paul Frijters Discussion Papers 2003-3, School of Economics and Finance, Queensland University of Technology.
- Frijters, Paul & van der Klaauw, Bas, 2004. "Job Search with Nonparticipation," IZA Discussion Papers 1407, Institute for the Study of Labor (IZA).
- Addison, John T. & Centeno, Mario & Portugal, Pedro, 2008.
"Unemployment Benefits and Reservation Wages: Key Elasticities from a Stripped-Down Job Search Approach,"
IZA Discussion Papers
3357, Institute for the Study of Labor (IZA).
- John T. Addison & M�Rio Centeno & Pedro Portugal, 2010. "Unemployment Benefits and Reservation Wages: Key Elasticities from a Stripped-Down Job Search Approach," Economica, London School of Economics and Political Science, vol. 77(305), pages 46-59, 01.
- John T. Addison & Mário Centeno & Pedro Portugal, 2008. "Unemployment Benefits and Reservation Wages: Key Elasticities from a Stripped-Down Job Search Approach," Working Papers w200803, Banco de Portugal, Economics and Research Department.
- Jeff Dominitz, 1998. "Earnings Expectations, Revisions, And Realizations," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 374-388, August.
- Mortensen, Dale T. & Pissarides, Christopher A., 1999.
"New developments in models of search in the labor market,"
Handbook of Labor Economics,
in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627
- Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers.
- Mayhew, Ken & Rosewell, Bridget, 1981. "Occupational Mobility in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 43(3), pages 225-55, August.
- Greenhalgh, Christine A & Stewart, Mark B, 1985. "The Occupational Status and Mobility of British Men and Women," Oxford Economic Papers, Oxford University Press, vol. 37(1), pages 40-71, March.
- Imbens, Guido & Abadie, Alberto, 2008.
"On the Failure of the Bootstrap for Matching Estimators,"
3043415, Harvard University Department of Economics.
- Alberto Abadie & Guido W. Imbens, 2008. "On the Failure of the Bootstrap for Matching Estimators," Econometrica, Econometric Society, vol. 76(6), pages 1537-1557, November.
- Alberto Abadie & Guido W. Imbens, 2006. "On the Failure of the Bootstrap for Matching Estimators," NBER Technical Working Papers 0325, National Bureau of Economic Research, Inc.
- Sarah Brown & Jennifer Roberts & Karl Taylor, 2010.
"Reservation wages, labour market participation and health,"
Journal of the Royal Statistical Society Series A,
Royal Statistical Society, vol. 173(3), pages 501-529.
- Sarah Brown & Jenny Roberts & Karl Taylor, 2008. "Reservation Wages, Labour Market Participation And Health," Working Papers 2008002, The University of Sheffield, Department of Economics, revised Feb 2008.
- Hwang, Hae-shin & Mortensen, Dale T & Reed, W Robert, 1998. "Hedonic Wages and Labor Market Search," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 815-47, October.
- Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-76, November.
- Hogan, Vincent, 2004.
"Wage aspirations and unemployment persistence,"
Journal of Monetary Economics,
Elsevier, vol. 51(8), pages 1623-1643, November.
- V. Joseph Hotz & Guido W. Imbens & Julie H. Mortimer, 1999. "Predicting the Efficacy of Future Training Programs Using Past Experiences," NBER Technical Working Papers 0238, National Bureau of Economic Research, Inc.
- Jalan, Jyotsna & Ravallion, Martin, 2003.
"Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 21(1), pages 19-30, January.
- Jyotsna Jalan & Martin Ravallion, 2000. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity Score Matching," Econometric Society World Congress 2000 Contributed Papers 0873, Econometric Society.
- Blackaby, D.H. & Latreille, P.L. & Murphy, P.D. & O'Leary, N.C. & Sloane, P.J., 2007.
"An analysis of reservation wages for the economically inactive,"
Elsevier, vol. 97(1), pages 1-5, October.
- Blackaby, David H. & Latreille, Paul L. & Murphy, Philip D. & O'Leary, Nigel C. & Sloane, Peter J., 2006. "An Analysis of Reservation Wages for the Economically Inactive," IZA Discussion Papers 1980, Institute for the Study of Labor (IZA).
- Gorter, Dirk & Gorter, Cees, 1993. "The Relation between Unemployment Benefits, the Reservation Wage and Search Duration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(2), pages 199-214, May.
- Dey, Matthew & Flinn, Christopher, 2008.
"Household search and health insurance coverage,"
Journal of Econometrics,
Elsevier, vol. 145(1-2), pages 43-63, July.
- Jones, Stephen R G, 1988. "The Relationship between Unemployment Spells and Reservation Wages as a Test of Search Theory," The Quarterly Journal of Economics, MIT Press, vol. 103(4), pages 741-65, November.
- Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.