The Reservation Wage of Unemployed Persons in the Federal Republic of Germany: Theory and Empirical Tests
AbstractThis study examines the determinants of the reservation wage of unemployed persons in the Federal Republic of Germany in 1976. The theoretical section presents the derivation of an optimal reservation wage and shows the source of an ambiguity of some explanatory variables. The data basis are unemployed persons leaving the unemployment register within a given sample week. For a subset of them, we know their reservation wage and a set of personal characteristics. Other variables, such as the wage offer distribution and demand side variables, are obtained by employing other data. Methodological problems, such as as a sample selection bias, are taken into account. As a result, individual characteristics and the wage offer distribution are dominant causes of the reservation wage, but demand side variables and the entitlement to unemployment compensation play minor roles.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0578.
Date of creation: Nov 1980
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
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.:
- Salant, Stephen W, 1977.
"Search Theory and Duration Data: A Theory of Sorts,"
The Quarterly Journal of Economics,
MIT Press, vol. 91(1), pages 39-57, February.
- Stephen W. Salant, 1974. "Search theory and duration data: a theory of sorts," Special Studies Papers 42, Board of Governors of the Federal Reserve System (U.S.).
- Mellow, Wesley, 1978. "Search Costs and the Duration of Unemployment," Economic Inquiry, Western Economic Association International, vol. 16(3), pages 423-30, July.
- Wolfgang Franz, 1979. "The Duration of Youth Unemployment in West Germany: Some Theoretical Considerations," NBER Working Papers 0397, National Bureau of Economic Research, Inc.
- Danforth, John P., 1977. "Wealth and the value of generalized lotteries," Journal of Economic Theory, Elsevier, vol. 15(1), pages 54-71, June.
- Burdett, Kenneth & Mortensen, Dale T, 1980.
"Search, Layoffs, and Labor Market Equilibrium,"
Journal of Political Economy,
University of Chicago Press, vol. 88(4), pages 652-72, August.
- Feinberg, Robert M, 1977. "Risk Aversion, Risk, and the Duration of Unemployment," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 264-71, August.
- Steven H. Sandell, 1980. "Job search by unemployed women: Determinants of the asking wage," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 33(3), pages 368-378, April.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
- Spence, Michael & Zeckhauser, Richard J, 1972. "The Effect of the Timing of Consumption Decisions and the Resolution of Lotteries on the Choice of Lotteries," Econometrica, Econometric Society, vol. 40(2), pages 401-03, March.
- Hicks, J. R., 1975. "Value and Capital: An Inquiry into some Fundamental Principles of Economic Theory," OUP Catalogue, Oxford University Press, edition 2, number 9780198282693.
- Gronau, Reuben, 1971. "Information and Frictional Unemployment," American Economic Review, American Economic Association, vol. 61(3), pages 290-301, June.
- Burdett, Kenneth, 1979. "Unemployment Insurance Payments as a Search Subsidy: A Theoretical Analysis," Economic Inquiry, Western Economic Association International, vol. 17(3), pages 333-43, July.
- Kohn, Meir G. & Shavell, Steven, 1974. "The theory of search," Journal of Economic Theory, Elsevier, vol. 9(2), pages 93-123, October.
- John M. Barron & Wesley Mellow, 1979. "Search Effort in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 389-404.
- John M. Barron & Otis W. Gilley, 1979. "The effect of unemployment insurance on the search process," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 32(3), pages 363-366, April.
- Rothschild, Michael, 1974. "Searching for the Lowest Price When the Distribution of Prices Is Unknown," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 689-711, July/Aug..
- Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-66, September.
- Humpert, Stephan & Pfeifer, Christian, 2013.
"Explaining age and gender differences in employment rates : a labor supply side perspective,"
Journal for Labour Market Research,
Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(1), pages 1-17.
- Stephan Humpert & Christian Pfeifer, 2011. "Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective," Working Paper Series in Economics 214, University of Lüneburg, Institute of Economics.
- Stephan Humpert & Christian Pfeifer, 2012. "Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective," SOEPpapers on Multidisciplinary Panel Data Research 449, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Björn Christensen, 2001. "The Determinants of Reservation Wages in Germany Does a Motivation Gap Exist?," Kiel Working Papers 1024, Kiel Institute for the World Economy.
- John Davis & Patrick Minford, 1986.
"Germany and the European disease,"
International Finance Discussion Papers
296, Board of Governors of the Federal Reserve System (U.S.).
- John DAVIS & Patrick MINFORD, 1986. "Germany and the European Disease," Discussion Papers (REL - Recherches Economiques de Louvain) 1986038, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Hans H. Glismann & Klaus Schrader, 2000. "Zur Reform der deutschen Arbeitslosenversicherung � Probleme und Lösungsansätze in der deutschen Literatur," Kiel Working Papers 995, Kiel Institute for the World Economy.
- Eswar Prasad, 2003.
"What Determines the Reservation Wages of Unemployed Workers? New Evidence from German Micro Data,"
IMF Working Papers
03/4, International Monetary Fund.
- Prasad, Eswar, 2003. "What Determines the Reservation Wages of Unemployed Workers? New Evidence from German Micro Data," IZA Discussion Papers 694, Institute for the Study of Labor (IZA).
- Constant, Amelie F. & Krause, Annabelle & Rinne, Ulf & Zimmermann, Klaus F., 2010.
"Reservation Wages of First and Second Generation Migrants,"
IZA Discussion Papers
5396, Institute for the Study of Labor (IZA).
- Amelie Constant & Annabelle Krause & Ulf Rinne & Klaus F. Zimmermann, 2010. "Reservation Wages of First and Second Generation Migrants," Discussion Papers of DIW Berlin 1089, DIW Berlin, German Institute for Economic Research.
- Constant, Amelie & Krause, Annabelle & Rinne, Ulf & Zimmermann, Klaus F, 2011. "Reservation Wages of First and Second Generation Migrants," CEPR Discussion Papers 8208, C.E.P.R. Discussion Papers.
- Maani Sholeh, 1983. "La Duración del Desempleo y el Salario de Reserva de Varones Desempleados: El Caso Chileno," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 20(59), pages 101-112.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.