What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data
This paper provides new empirical evidence on the relationship between reservation wages of unemployed workers and macroeconomic factors--including the unemployment rate and generosity of the unemployment compensation system--as well as individual-specific determinants, such as human capital proxies and length of unemployment spell. The longitudinal dataset provides an interesting perspective on how reservation wages change over time and how they correlate with accepted wage offers for workers who move from unemployment to employment. The findings shed light on the disincentive effects of the German tax and transfer system for the employment decisions of unemployed workers at different skill levels.
|Date of creation:||01 Jan 2003|
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IMF Working Papers
00/22, International Monetary Fund.
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Discussion Papers of DIW Berlin
50, DIW Berlin, German Institute for Economic Research.
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- Blau, David M, 1991. "Search for Nonwage Job Characteristics: A Test of the Reservation Wage Hypothesis," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 186-205, April.
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1011, National Bureau of Economic Research, Inc.
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