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The association between reported and calculated reservation wages

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  • Böheim, René

Abstract

Do reported reservation wages correspond to the concept of reservation wages that economists have? Using panel data on British unemployed I calculate reservation wages from a search model and compare these with reported reservation wages. It is shown that men's reported reservation wages are greater than what the model predicts, and that for women there is hardly a relation between the two variables.

Suggested Citation

  • Böheim, René, 2002. "The association between reported and calculated reservation wages," ISER Working Paper Series 2002-07, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2002-07
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    References listed on IDEAS

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    1. Alexandra Heath & Troy Swann, 1999. "Reservation Wages and the Duration of Unemployment," RBA Research Discussion Papers rdp1999-02, Reserve Bank of Australia.
    2. Gregg, Paul & Wadsworth, Jonathan, 1996. "How Effective Are State Employment Agencies? Jobcentre Use and Job Matching in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 443-467, August.
    3. Lancaster, Tony & Chesher, Andrew, 1983. "An Econometric Analysis of Reservation Wages," Econometrica, Econometric Society, vol. 51(6), pages 1661-1676, November.
    4. Stephen R. G. Jones, 1988. "The Relationship Between Unemployment Spells and Reservation Wages as a Test of Search Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(4), pages 741-765.
    5. Lancaster, Tony, 1985. "Simultaneous equations models in applied search theory," Journal of Econometrics, Elsevier, vol. 28(1), pages 113-126, April.
    6. Dolton, Peter J & van der Klaauw, Wilbert, 1995. "Leaving Teaching in the UK: A Duration Analysis," Economic Journal, Royal Economic Society, vol. 105(429), pages 431-444, March.
    7. James Heckman, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
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    Cited by:

    1. Madhu Mohanty, 2005. "An alternative method of estimating the worker's reservation wage," International Economic Journal, Taylor & Francis Journals, vol. 19(4), pages 501-522.
    2. María Angeles Davia & Oscar D. Marcenaro Gutiérrez, 2008. "Exploring the link between employment search time and reservation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 186(3), pages 91-121, October.
    3. Richard Walker, 2003. "Reservation Wages-Measurement and Determinants: Evidence from the KMP Survey," SALDRU/CSSR Working Papers 038, Southern Africa Labour and Development Research Unit, University of Cape Town.
    4. Paolo Sestito & Eliana Viviano, 2011. "Reservation Wages: Explaining Some Puzzling Regional Patterns," LABOUR, CEIS, vol. 25(1), pages 63-88, March.

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