Reservation Wages, Offered Wages, and Unemployment Duration � New Empirical Evidence
AbstractThis paper studies the reservation wages of unemployed persons and the wages offered them in Germany from 1987 to 1998, whereby special focus is placed on unemployment duration. The results of the study indicate that in contrast to reservation wages, offered wages decline considerably with duration of unemployment. This is the main reason that ratios of reservation wages to offered wages increase rapidly with duration of unemployment; on average, reservation wages begin to exceed offered wages after nine months of unemployment. Thus, the chance that long-term unemployed persons will receive a wage offer that is higher than their own reservation wage is extremely slight.
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1095.
Length: 25 pages
Date of creation: Jan 2002
Date of revision:
Reservation Wages; Offered Wages; Unemployment Duration; Labour Supply;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
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.:
- Hilmar Schneider & Olaf Fuchs, 2000. "Anreizwirkungen der Arbeitslosenunterstützung auf die Arbeitssuche," Wirtschaft im Wandel, Halle Institute for Economic Research, vol. 6(11), pages 312-317.
- Enswar Prasad, 2001. "The Dynamics of Reservation Wages: Preliminary Evidence from the GSOEP," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 44-50.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Guenter Lang, 2000. "Native-Immigrant Wage Differentials in Germany - Assimilation, Discrimination, or Human Capital?," Discussion Paper Series 197, Universitaet Augsburg, Institute for Economics.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- From the comments, on nominal wage stickiness
by Tyler Cowen in Marginal Revolution on 2011-08-18 11:32:23
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