Individual wealth, reservation wages and transitions into employment
AbstractIn this paper, we investigate the relationship between financial wealth, reservation wages and labour market transitions. According to the theory, higher levels of wealth will result in higher reservation wages and lower employment probabilities. We test for the validity of this assumption by estimating a simultaneous equations model of reservation wages, labour market transitions and wealth. The data used for the analysis relate to a sample of unemployed job searchers drawn from the Dutch Socio-Economic Panel. Wealth is found to have a significantly positive impact on the reservation wage. The overall impact of wealth on the employment probability is negative though small.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 9702.
Date of creation: 1997
Date of revision:
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Web page: http://center.uvt.nl
Other versions of this item:
- 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.
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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