We propose a dynamic model that explains why individuals may be reluctant to pick up work although the wage is above their reservation wage. Accepting low paid work will put them in an adverse position in future wage bargaining, as employers could infer the individual.s low reservation wage from his working history. Employers will exploit their knowledge o¤ering low wages to this individual in the future. Therefore, employees with low reservation wage strategically opt into unemployment to signal a high reservation wage.
|Date of creation:||Jul 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Vogelpothsweg 87, D-44227 Dortmund|
Phone: +49 +231 755 3182
Fax: +49 +231 755 4375
Web page: http://www.wiso.uni-dortmund.de/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:mik:wpaper:06_02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eva Borchard)The email address of this maintainer does not seem to be valid anymore. Please ask Eva Borchard to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.