Wage aspirations and unemployment persistence
AbstractThe reservation wage is an integral part of most theories of involuntary unemployment. We use panel data to examine the empirical determinants of the reservation wage - in particular the influence of previous wages - and consider what this implies for the evolution of the natu- ral rate of unemployment. We find that previous wages have a significant but relatively small effect on reservation wages (an elasticity between 0.15 and 0.47). We also find considerable differences across genders with previous wages being more important for men and market wages being more important for women. Overall our results suggest that unemployment will adjust relatively quickly to shocks.
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 Journal of Monetary Economics.
Volume (Year): 51 (2004)
Issue (Month): 8 (November)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505566
Other versions of this item:
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
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.:
- Douglas Staiger & James H. Stock, 1994.
"Instrumental Variables Regression with Weak Instruments,"
NBER Technical Working Papers
0151, National Bureau of Economic Research, Inc.
- Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
- repec:pri:indrel:722 is not listed on IDEAS
- David Card, 1995.
"The Wage Curve: A Review,"
Journal of Economic Literature,
American Economic Association, vol. 33(2), pages 285-299, June.
- Stancanelli, E.G.F. & Bloemen, H.G., 1997.
"Individual wealth, reservation wages and transitions into employment,"
9702, Tilburg University, Center for Economic Research.
- Bloemen, Hans G & Stancanelli, Elena G F, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 400-439, April.
- Elena Stancanelli & Hans Bloemen, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Sciences Po publications info:hdl:2441/9704, Sciences Po.
- Bloemen, H.G. & Stancanelli, E.G.F., 1997. "Individual Wealth, Reservation Wages and Transitions into Employment," Discussion Paper 1997-02, Tilburg University, Center for Economic Research.
- Laurence Ball & Robert Moffitt, 2001.
"Productivity Growth and the Phillips Curve,"
NBER Working Papers
8421, National Bureau of Economic Research, Inc.
- Bound, John, et al, 1994. "Evidence on the Validity of Cross-Sectional and Longitudinal Labor Market Data," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 345-68, July.
- Feldstein, Martin & Poterba, James, 1984.
"Unemployment insurance and reservation wages,"
Journal of Public Economics,
Elsevier, vol. 23(1-2), pages 141-167.
- Jones, Stephen R G, 1989. "Reservation Wages and the Cost of Unemployment," Economica, London School of Economics and Political Science, vol. 56(222), pages 225-46, May.
- René Böheim & Gerard Thomas Horvath & Rudolf Winter-Ebmer, 2010.
"Great Expectations: Past Wages and Unemployment Durations,"
Economics working papers
2010-09, Department of Economics, Johannes Kepler University Linz, Austria.
- Böheim, Renè & Horvath, Gerard Thomas & Winter-Ebmer, Rudolf, 2011. "Great expectations: Past wages and unemployment durations," Labour Economics, Elsevier, vol. 18(6), pages 778-785.
- Böheim, René & Horvath, Gerard Thomas & Winter-Ebmer, Rudolf, 2010. "Great Expectations: Past Wages and Unemployment Durations," CEPR Discussion Papers 7974, C.E.P.R. Discussion Papers.
- René Böheim & Gerard Thomas Horvath & Rudolf Winter-Ebmer, 2010. "Great Expectations: Past Wages and Unemployment Durations," NRN working papers 2010-07, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- 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.
- 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.
- Xavier Raurich & Valeri Sorolla, 2008. "A General Framework for Growth Models with Non-Competitive Labor and Product Markets and Disequilibrium Unemployment," Working Papers 369, Barcelona Graduate School of Economics.
- Tripier, Fabien, 2006.
"Sticky prices, fair wages, and the co-movements of unemployment and labor productivity growth,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 30(12), pages 2749-2774, December.
- Fabien Tripier, 2005. "Sticky prices, fair wages, and the co-movements of unemployment and labor productivity growth," Macroeconomics 0510015, EconWPA.
- Bemjamin Villena-Roldan, 2009.
"Aggregate Implications of Employer Search and Recruiting Selection,"
2009 Meeting Papers
97, Society for Economic Dynamics.
- Benjamín Villena Roldán, 2010. "Aggregate Implications of Employer Search and Recruiting Selection," Documentos de Trabajo 271, Centro de Economía Aplicada, Universidad de Chile.
- Marco Caliendo & Ludovica Gambaro & Peter Haan, 2007.
"The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply,"
Discussion Papers of DIW Berlin
670, DIW Berlin, German Institute for Economic Research.
- Marco Caliendo & Ludovica Gambaro & Peter Haan, 2009. "The impact of income taxation on the ratio between reservation and market wages and the incentives for labour supply," Applied Economics Letters, Taylor & Francis Journals, vol. 16(9), pages 877-883.
- Caliendo, Marco & Gambaro, Ludovica & Haan, Peter, 2007. "The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply," IZA Discussion Papers 2599, Institute for the Study of Labor (IZA).
- Xavier Raurich (Universitat de Barcelona) & Valeri Sorolla (Universitat Autonoma de Barcelona), 2012. "Growth Models with Exogenous Saving Rates, Unemployment and Wage Inertia," Working Papers in Economics 287, Universitat de Barcelona. Espai de Recerca en Economia.
- 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.
- Sven Schreiber, 2009. "Explaining shifts in the unemployment rate with productivity slowdowns and accelerations: a co-breaking approach," Kiel Working Papers 1505, Kiel Institute for the World Economy.
- Brown, Sarah & Taylor, Karl, 2013. "Reservation wages, expected wages and unemployment," Economics Letters, Elsevier, vol. 119(3), pages 276-279.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
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.