Reservation wages: explaining some puzzling regional patterns
We use the Italian Labour Force Survey and the European Household Panel Survey to analyse the distribution of the reservation wages reported by jobseekers. In Italy, reservation wages appear to be higher in the South - the low income and high unemployment area of the country - than in the North and Centre. A similar, rather counterintuitive, pattern, however, can also be found in Finland, France and Spain. First, we show that the way in which these data are commonly collected generates double selection bias. Second, we show that this bias has a strong effect on the estimation of the geographical pattern of reservation wages in many countries. The size of this bias is substantial in Italy. When controlling for it, reservation wages are 10 per cent higher in the North and Centre than in the South.
|Date of creation:||Dec 2008|
|Contact details of provider:|| Postal: Via Nazionale, 91 - 00184 Roma|
Web page: http://www.bancaditalia.it
More information through EDIRC
References listed on IDEAS
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.:
- Albert Alesina & Stephan Danninger & Massimo Rostagno, 2001.
"Redistribution Through Public Employment: The Case of Italy,"
IMF Staff Papers,
Palgrave Macmillan, vol. 48(3), pages 1-2.
- Stephan Danninger & Alberto Alesina & Massimo V. Rostagno, 1999. "Redistribution Through Public Employment; The Case of Italy," IMF Working Papers 99/177, International Monetary Fund.
- Alberto Alesina & Stephan Danninger & Massimo Rostagno, 1999. "Redistribution Through Public Employment: The Case of Italy," NBER Working Papers 7387, National Bureau of Economic Research, Inc.
- Harry J. Holzer, 1986. "Reservation Wages and Their Labor Market Effects for Black and White Male Youth," Journal of Human Resources, University of Wisconsin Press, vol. 21(2), pages 157-177.
- Ugo Trivellato & Anna Giraldo, 2006. "Assessing the 'Choosiness' of Job-seekers. An Exploratory Approach and Evidence for Italy," LABOUR, CEIS, vol. 20(1), pages 1-36, 03.
- Ugo Trivellato & Anna Giraldo, 2003. "Assessing the "Choosiness" of Job Seekers. An Exploratory Approach and Evidence for Italy," CESifo Working Paper Series 925, CESifo Group Munich.
- Addison, John T. & Centeno, Mario & Portugal, Pedro, 2004. "Reservation Wages, Search Duration, and Accepted Wages in Europe," IZA Discussion Papers 1252, Institute for the Study of Labor (IZA).
- John T. Addison & Mário Centeno & Pedro Portugal, 2004. "Reservation Wages, Search Duration, and Accepted Wages in Europe," Working Papers w200413, Banco de Portugal, Economics and Research Department.
- Tito Boeri & Pietro Garibaldi, "undated". "Shadow Activity and Unemployment in a Depressed Labor Market," Working Papers 177, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Boeri, Tito & Garibaldi, Pietro, 2002. "Shadow Activity and Unemployment in a Depressed Labour Market," CEPR Discussion Papers 3433, C.E.P.R. Discussion Papers.
- BÃ¶heim, RenÃ©, 2002. "The association between reported and calculated reservation wages," ISER Working Paper Series 2002-07, Institute for Social and Economic Research.
- Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90. Full references (including those not matched with items on IDEAS)