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Reservation Wages and Their Labor Market Effects for Black and White Male Youth

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  • Harry J. Holzer
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    Abstract

    This paper presents an empirical analysis of self-reported reservation wages for unemployed young black and white males. The results show that young blacks seek wages which are comparable to those of young whites in absolute terms, but which are higher relative to what is available on the demand side of the market. These relatively higher reservation wages of young blacks contribute to their unemployment durations and somewhat to their subsequently received wages. Changes in reservation wages may thus help to explain the trends in wages and employment of young blacks in recent years.

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    Bibliographic Info

    Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

    Volume (Year): 21 (1986)
    Issue (Month): 2 ()
    Pages: 157-177

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    Handle: RePEc:uwp:jhriss:v:21:y:1986:i:2:p:157-177

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    Web page: http://jhr.uwpress.org/

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    Cited by:
    1. Keith A. Bender & John Douglas Satun, 2009. "Constrained By Hours And Restricted In Wages: The Quality Of Matches In The Labor Market," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 512-529, 07.
    2. Tricia Gladden & Michelle Alexopoulos, 2004. "The Effects of Wealth, and Unemployment Benefits on Search Behavior and Labor Market Transitions," Econometric Society 2004 North American Summer Meetings 517, Econometric Society.
    3. Luttmer, Erzo F. P., 2007. "Does the Minimum Wage Cause Inefficient Rationing?," Working Paper Series rwp07-018, Harvard University, John F. Kennedy School of Government.
    4. Winter-Ebmer, Rudolf, 1998. "Unknown wage offer distribution and job search duration," Economics Letters, Elsevier, vol. 60(2), pages 237-242, August.
    5. Robert Wagmiller, 2007. "Race and the spatial segregation of jobless men in urban America," Demography, Springer, vol. 44(3), pages 539-562, August.
    6. Kenneth Couch & Robert Fairlie, 2010. "Last hired, first fired? black-white unemployment and the business cycle," Demography, Springer, vol. 47(1), pages 227-247, February.
    7. Donald Haurin & Kala Sridhar, 2003. "The impact of local unemployment rates on reservation wages and the duration of search for a job," Applied Economics, Taylor & Francis Journals, vol. 35(13), pages 1469-1476.
    8. Paolo Sestito & Eliana Viviano, 2011. "Reservation Wages: Explaining Some Puzzling Regional Patterns," LABOUR, CEIS, vol. 25(1), pages 63-88, 03.
    9. Dawkins, Casey J. & Shen, Qing & Sanchez, Thomas W., 2005. "Race, space, and unemployment duration," Journal of Urban Economics, Elsevier, vol. 58(1), pages 91-113, July.
    10. Roland G. Fryer , Jr. & Devah Pager & J�rg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633 - 689.
    11. H. J. Holzer & S. Danziger, . "Are Jobs Available for Disadvantaged Workers in Urban Areas?," Institute for Research on Poverty Discussion Papers 1157-98, University of Wisconsin Institute for Research on Poverty.

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