Unemployment duration and workers' wage aspirations in Spain
AbstractThis paper examines unemployed workers' declared willingness to accept a job with a wage lower than the one warranted by their qualification. We analyze which personal and economic characteristics determine this willingness and how it changes as unemployment spells lengthen. Moreover, we also study the influence of this willingness on unemployment duration. The main results are: (i) Young workers, those less educated and those living in regions with high unemployment rates show a more positive attitude towards accepting lower wages while the college educated and married women with a working husband show substantially more negative attitudes; (ii) The exhaustion of unemployment benefits indeed shows significant positive effects in the transition probability of the attitude from negative to positive. This effect is even larger when unobserved heterogeneity is controlled for; (iii) Regarding the effects of this attitude on the exit probability from unemployment, we find that the expressed willingness to work for lower wages is not only reflecting the worker's reservation wage but also some unobserved heterogeneity; (iv) The negative duration dependence of the exit probability from unemployment is substantially reduced when unobserved heterogeneity is controlled for.
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Reservation wage ; unemployment duration ; unobserved heterogeneity;
Other versions of this item:
- Namkee Ahn & José Ignacio García-Pérez, 2002. "Unemployment duration and workers' wage aspirations in Spain," Spanish Economic Review, Springer, vol. 4(2), pages 103-118.
- Namkee Ahn & J. Ignacio García Pérez, 2000. "Unemployment duration and workers' wage aspirations in Spain," Economics Working Papers 426, Department of Economics and Business, Universitat Pompeu Fabra.
- Namkee Ahn & J. Ignacio García-Pérez, . "Unemployment duration and worker's wage aspiration in Spain," Studies on the Spanish Economy 58, FEDEA.
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
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