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Do Reservation Wages Really Decline? Some International Evidence on the Determinants of Reservation Wages

  • John T. Addison
  • Mário Centeno
  • Pedro Portugal

Using cross-country data, we investigate the determinants of reservation wages and their course over the jobless spell. Higher unemployment benefits lead to higher reservation wages. Further, repeated observations on the same individual provide scant evidence of declining reservation wages.

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Paper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w200802.

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Date of creation: 2008
Date of revision:
Handle: RePEc:ptu:wpaper:w200802
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  1. Hans Bloemen & Elena Stancanelli, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Post-Print hal-01017002, HAL.
  2. John T. Addison & M�Rio Centeno & Pedro Portugal, 2010. "Unemployment Benefits and Reservation Wages: Key Elasticities from a Stripped-Down Job Search Approach," Economica, London School of Economics and Political Science, vol. 77(305), pages 46-59, 01.
  3. repec:spo:wpecon:info:hdl:2441/9704 is not listed on IDEAS
  4. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
  5. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366.
  6. Eswar Prasad, 2003. "What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data," IMF Working Papers 03/4, International Monetary Fund.
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