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Reservation wages and the earnings capacity of lone and couple mothers: Are wage expectations too high?

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Author Info
Gray, Matthew
Renda, Jenny

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Abstract

This paper presents evidence on the extent to which non-employed mothers who would like to work are able to provide an estimate of their reservation income. There is virtually no existing Australian research on the extent to which jobseekers are able to estimate their reservation income. The paper also tests the hypothesis that unrealistic wage expectations are an important factor in explaining relatively low employment rates among mothers by comparing reservation hourly wages with the estimated earning capacity of mothers. If reservation wages are greater than what we estimate the mother would earn in the labour market, then this is likely to make it difficult to find employment.

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File URL: http://mpra.ub.uni-muenchen.de/1067/
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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1067.

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Date of creation: 2006
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Handle: RePEc:pra:mprapa:1067

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Related research
Keywords: Employment; reservation wages; working hours;

Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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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.:
  1. David Ingles, 1998. "Overcoming Anomalies in the Interaction of Tax and Social Security," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(3), pages 271-280. [Downloadable!] (restricted)
  2. Michael Keating & Simon Lambert, 1998. "Improving Incentives: Changing the Interface of Tax and Social Security," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(3), pages 281-289. [Downloadable!] (restricted)
  3. Bob Gregory, 1999. "Children and the Changing Labour Market: Joblessness in Families with Dependent Children," CEPR Discussion Papers 406, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  4. Denise J. Doiron, 2003. "Is Under-Employment due to Labour Hoarding? Evidence from the Australian Workplace Industrial Relations Survey," The Economic Record, The Economic Society of Australia, vol. 79(246), pages 306-323, 09. [Downloadable!] (restricted)
  5. Yi-Ping Tseng & Roger Wilkins, 2003. "Reliance on Income Support in Australia: Prevalence and Persistence," The Economic Record, The Economic Society of Australia, vol. 79(245), pages 196-217, 06. [Downloadable!] (restricted)
  6. Peter Dawkins, 2002. "The 'Five Economists' Plan: The Original Idea and Further Developments," CEPR Discussion Papers 450, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
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