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Unemployment duration and worker's wage aspiration in Spain

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  • Namkee Ahn
  • J. Ignacio García-Pérez

Abstract

This paper examines unemployed workers' declared willingness to work for wages lower than the one adequate for their qualification. We analyze which personal and economic characteristics determine this willingness and how it changes along the individuals' unemployment spells. The main results are: (i) Young workers, less educated and those living in regions or times of high unemployment are more willing to accept reduced wages while married women with a working husband are much less willing to do so; (ii) Once the individual fixed effect is controlled for, the willingness to work for reduced wages increases with the duration of unemployment; (iii) Not having access to unemployment benefits increases the probability that initially unwilling workers become willing to accept reduced wages.
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Suggested Citation

  • Namkee Ahn & J. Ignacio García-Pérez, "undated". "Unemployment duration and worker's wage aspiration in Spain," Studies on the Spanish Economy 58, FEDEA.
  • Handle: RePEc:fda:fdaeee:58
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    References listed on IDEAS

    as
    1. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-138, February.
    2. Gerard J. van den Berg, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Oxford University Press, vol. 57(2), pages 255-277.
    3. Ahn, Namkee & de la Rica, Sara & Ugidos, Arantza, 1999. "Willingness to Move for Work and Unemployment Duration in Spain," Economica, London School of Economics and Political Science, vol. 66(263), pages 335-357, August.
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    7. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
    8. Mortensen, Dale T., 1987. "Job search and labor market analysis," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 15, pages 849-919, Elsevier.
    9. J. Ignacio García-Pérez, 1998. "Non-Stationary Job Search with Firing: A Structural Estimation," Working Papers wp1998_9802, CEMFI.
    10. Ahn, Namkee & Ugidos-Olazabal, Arantza, 1995. "Duration of Unemployment in Spain: Relative Effects of Unemployment Benefit and Family Characteristics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(2), pages 249-264, May.
    11. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Oxford University Press, vol. 61(3), pages 417-434.
    12. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
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    14. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366, November.
    15. Namkee Ahn & Sara La De Rica, 1997. "The underground economy in Spain: an alternative to unemployment?," Applied Economics, Taylor & Francis Journals, vol. 29(6), pages 733-743.
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    Citations

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    Cited by:

    1. José Ignacio García Pérez & Yolanda Rebollo Sanz, 2005. "A Structural Estimation to Evaluate the Wage Penalty after Unemployment in Europe," Economic Working Papers at Centro de Estudios Andaluces E2005/15, Centro de Estudios Andaluces.
    2. García-Pérez, J. Ignacio & Muñoz-Bullón, Fernando, 2003. "The nineties in Spain: too much flexibility in the youth labour market?," DEE - Working Papers. Business Economics. WB wb030302, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    3. 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.
    4. repec:pri:cepsud:158krueger is not listed on IDEAS
    5. Gema Álvarez Llorente & Mª Soledad Otero Giráldez & Alberto Rodríguez Casal & Jacobo de Uña Álvarez, 2004. "La duración del desempleo de la mujer casada en Galicia," Working Papers 0409, Universidade de Vigo, Departamento de Economía Aplicada.
    6. 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.
    7. José Ignacio García Pérez & Fernando Múñoz Bullón, 2001. "The Nineties in Spain: so much Flexibility in the Labor Market?," Economic Working Papers at Centro de Estudios Andaluces E2001/01, Centro de Estudios Andaluces.
    8. J. Ignacio García‐Pérez, 2006. "Job separation in a non‐stationary search model: a structural estimation to evaluate alternative unemployment insurance systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(2), pages 245-272, March.
    9. 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.
    10. Selda Dudu, 2022. "Employability and Labor Income of Immigrants in the US: A Special Focus on the Roles of Language and Home Country Income Level," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 8(1), pages 15-34, June.

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    More about this item

    Keywords

    Reservation wage; unemployment duration; unobserved heterogenety;
    All these keywords.

    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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