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Reservation Wages and the Unemployment of Older Workers

Author

Listed:
  • Hila Axelrad

    (Boston College)

  • Israel Luski

    (The western Galilee College)

  • Miki Malul

    (Ben-Gurion University of the Negev)

Abstract

Our purpose is to examine the level of reservation wages among older unemployed (45+), and investigate what happens to the level of reservation wages as the length of unemployment increases. Using data from questionnaires completed by unemployed, we examined the reservation wages of 364 individuals and asked whether they would be willing to compromise in terms of their occupation, profession or geographic location to find a job. 112 of the participants responded to two questionnaires over a three-month period to determine the changes in their expectations over time. Additionally, we conducted qualitative interviews with 10 unemployed. We found that older people experienced longer periods of unemployment, and had a greater willingness to reduce salary expectations. The study establishes an innovative connection between older unemployed, reservation wages and the duration of unemployment, showing that higher reservation wages among older unemployed is the cause of prolonging their unemployment.

Suggested Citation

  • Hila Axelrad & Israel Luski & Miki Malul, 2017. "Reservation Wages and the Unemployment of Older Workers," Journal of Labor Research, Springer, vol. 38(2), pages 206-227, June.
    • Handle: RePEc:spr:jlabre:v:38:y:2017:i:2:d:10.1007_s12122-017-9247-6
    DOI: 10.1007/s12122-017-9247-6
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    3. Kristina Thomassen & Emil Sundstrup & Sebastian V. Skovlund & Lars L. Andersen, 2020. "Barriers and Willingness to Accept Re-Employment among Unemployed Senior Workers: The SeniorWorkingLife Study," IJERPH, MDPI, vol. 17(15), pages 1-9, July.
    4. Hila Axelrad & Miki Malul & Israel Luski, 2018. "Unemployment among younger and older individuals: does conventional data about unemployment tell us the whole story?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-12, December.

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