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Unemployment duration and workers' wage aspirations in Spain


  • Namkee Ahn
  • J. Ignacio Garcí-Pérez


This paper examines unemployed workers' declared willingness to accept a job with a wage lower than the one warranted by their qualification. We analyze which personal and economic characteristics determine this willingness and how it changes as unemployment spells lengthen. Moreover, we also study the influence of this willingness on unemployment duration. The main results are: (i) Young workers, those less educated and those living in regions with high unemployment rates show a more positive attitude towards accepting lower wages while the college educated and married women with a working husband show substantially more negative attitudes; (ii) The exhaustion of unemployment benefits indeed shows significant positive effects in the transition probability of the attitude from negative to positive. This effect is even larger when unobserved heterogeneity is controlled for; (iii) Regarding the effects of this attitude on the exit probability from unemployment, we find that the expressed willingness to work for lower wages is not only reflecting the worker's reservation wage but also some unobserved heterogeneity; (iv) The negative duration dependence of the exit probability from unemployment is substantially reduced when unobserved heterogeneity is controlled for.

Suggested Citation

  • Namkee Ahn & J. Ignacio Garcí-Pérez, "undated". "Unemployment duration and workers' wage aspirations in Spain," Working Papers 99-20, FEDEA.
  • Handle: RePEc:fda:fdaddt:99-20

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    Cited by:

    1. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
    2. repec:pri:cepsud:158krueger is not listed on IDEAS
    3. Anders Forslund & Alan Krueger, 2010. "Did Active Labor Market Policies Help Sweden Rebound from the Depression of the Early 1990s?," NBER Chapters,in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 159-187 National Bureau of Economic Research, Inc.
    4. Ayala, Luis & Rodriguez, Magdalena, 2007. "Barriers to employment and welfare dynamics: Evidence from Spain," Journal of Policy Modeling, Elsevier, vol. 29(2), pages 237-257.
    5. Jacobo de Uña Álvarez & Gema Álvarez Llorente & Mª Soledad Otero Giráldez, 2004. "Estimation of time spent in unemployment for married women: An application at regional level," Working Papers 0410, Universidade de Vigo, Departamento de Economía Aplicada.

    More about this item


    Reservation wage ; unemployment duration ; unobserved heterogeneity;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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