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Youth reservation wages in Romania: are wage expectations realistic?

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  • Maria Denisa Vasilescu
  • Liviu Stelian Begu

Abstract

Romania has been experiencing difficulties in integrating young people into the labour market in recent years. Moreover, the problem of migration is extremely acute, young people being the most eager to leave the country. Considering also the demographics – declining birth-rates and an aging population, the risk of imbalance is extremely high. Thus, it is important to design strategies targeting young people, helping them find quality jobs so they contribute to the sustainable growth and development of the Romanian economy. In this context, the paper aims to identify the determinants of youth reservation wages and to analyse whether youth wage expectations are too high and prevent the acceptance of available jobs. The article contributes to the explanation of youth unemployment by analysing their behaviour, complementing the existing studies that focus mainly on macroeconomic and institutional factors. The results indicated that young unemployed people really have high reservation wages, expecting more than we estimated to earn on the market, considering their personal characteristics. The main factors influencing their reservation wage are: age, gender, education, intention to emigrate, duration of unemployment, and friends’ wages.

Suggested Citation

  • Maria Denisa Vasilescu & Liviu Stelian Begu, 2019. "Youth reservation wages in Romania: are wage expectations realistic?," Applied Economics Letters, Taylor & Francis Journals, vol. 26(14), pages 1157-1161, August.
    • Handle: RePEc:taf:apeclt:v:26:y:2019:i:14:p:1157-1161
    DOI: 10.1080/13504851.2018.1540838
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    Cited by:

    1. Dan Bodescu & Alexandru-Dragoş Robu & Andy Felix Jităreanu & Ioan Puiu & Andrei Mihai Gafencu & Florin Daniel Lipşa, 2022. "Work Satisfaction in the Food Industry—A Premise for Economic Performance," Agriculture, MDPI, vol. 12(7), pages 1-21, July.
    2. Horie, Norio & Iwasaki, Ichiro & 岩﨑, 一郎, 2022. "Returns to Education in European Emerging Markets: A Meta-Analytic Review," RRC Working Paper Series 95, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    3. Sam Jones & Ricardo Santos & Gimelgo Xirinda, 2020. "Misinformed, mismatched, or misled?: Explaining the gap between expected and realized graduate earnings in Mozambique," WIDER Working Paper Series wp-2020-47, World Institute for Development Economic Research (UNU-WIDER).

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