The Reservation Wage of Unemployed Persons in the Federal Republic of Germany: Theory and Empirical Tests
This study examines the determinants of the reservation wage of unemployed persons in the Federal Republic of Germany in 1976. The theoretical section presents the derivation of an optimal reservation wage and shows the source of an ambiguity of some explanatory variables. The data basis are unemployed persons leaving the unemployment register within a given sample week. For a subset of them, we know their reservation wage and a set of personal characteristics. Other variables, such as the wage offer distribution and demand side variables, are obtained by employing other data. Methodological problems, such as as a sample selection bias, are taken into account. As a result, individual characteristics and the wage offer distribution are dominant causes of the reservation wage, but demand side variables and the entitlement to unemployment compensation play minor roles.
|Date of creation:||Nov 1980|
|Publication status:||published as Franz, W. and K. Konig. "The Nature And Causes Of Unemployment In The Federal Republic Of Germany Since The 1970s: An Empirical Investigation," Economica, 1986, v53(210S), S219-S244|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Hicks, J. R., 1975. "Value and Capital: An Inquiry into some Fundamental Principles of Economic Theory," OUP Catalogue, Oxford University Press, edition 2, number 9780198282693, December.
- Mellow, Wesley, 1978. "Search Costs and the Duration of Unemployment," Economic Inquiry, Western Economic Association International, vol. 16(3), pages 423-30, July.
- Stephen W. Salant, 1977.
"Search Theory and Duration Data: A Theory of Sorts,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 91(1), pages 39-57.
- Stephen W. Salant, 1974. "Search theory and duration data: a theory of sorts," Special Studies Papers 42, Board of Governors of the Federal Reserve System (U.S.).
- Spence, Michael & Zeckhauser, Richard J, 1972. "The Effect of the Timing of Consumption Decisions and the Resolution of Lotteries on the Choice of Lotteries," Econometrica, Econometric Society, vol. 40(2), pages 401-03, March.
- Wolfgang Franz, 1979. "The Duration of Youth Unemployment in West Germany: Some Theoretical Considerations," NBER Working Papers 0397, National Bureau of Economic Research, Inc.
- John M. Barron & Otis W. Gilley, 1979. "The Effect of Unemployment Insurance on the Search Process," ILR Review, Cornell University, ILR School, vol. 32(3), pages 363-366, April.
- Steven H. Sandell, 1980. "Job Search by Unemployed Women: Determinants of the Asking Wage," ILR Review, Cornell University, ILR School, vol. 33(3), pages 368-378, April.
- Burdett, Kenneth & Mortensen, Dale T, 1980.
"Search, Layoffs, and Labor Market Equilibrium,"
Journal of Political Economy,
University of Chicago Press, vol. 88(4), pages 652-672, August.
- Kohn, Meir G. & Shavell, Steven, 1974. "The theory of search," Journal of Economic Theory, Elsevier, vol. 9(2), pages 93-123, October.
- John M. Barron & Wesley Mellow, 1979. "Search Effort in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 14(3), pages 389-404.
- Dale T. Mortensen, 1977. "Unemployment Insurance and Job Search Decisions," ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
- Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-66, September.
- Feinberg, Robert M, 1977. "Risk Aversion, Risk, and the Duration of Unemployment," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 264-71, August.
- Danforth, John P., 1977. "Wealth and the value of generalized lotteries," Journal of Economic Theory, Elsevier, vol. 15(1), pages 54-71, June.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
- Burdett, Kenneth, 1979. "Unemployment Insurance Payments as a Search Subsidy: A Theoretical Analysis," Economic Inquiry, Western Economic Association International, vol. 17(3), pages 333-43, July.
- Kim B. Clark & Lawrence H. Summers, 1979. "Labor Market Dynamics and Unemployemnt: A Reconsideration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(1), pages 13-72.
- Gronau, Reuben, 1971. "Information and Frictional Unemployment," American Economic Review, American Economic Association, vol. 61(3), pages 290-301, June.
- Rothschild, Michael, 1974. "Searching for the Lowest Price When the Distribution of Prices Is Unknown," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 689-711, July/Aug..
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0578. 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: ()
If references are entirely missing, you can add them using this form.