IDEAS home Printed from https://ideas.repec.org/p/shf/wpaper/2009001.html

Reservation Wages, Expected wages and the duration of Unemployment: evidence from British Panel data

Author

Listed:
  • Sarah Brown

    (Department of Economics, The University of Sheffield)

  • Karl Taylor

Abstract

In this paper we analyse the role of wage expectations in an empirical model of incomplete spells of unemployment and reservation wages. To be specific, we model the duration of unemployment, reservation wages and expected wages simultaneously for a sample of individuals who are not in work, where wage expectations are identified via an exogenous policy shock based upon the introduction of Working Family Tax Credits (WFTC) in the UK. The results from the empirical analysis, which is based on the British Household Panel Survey, suggest that WFTC eligibility served to increase expected wages and that expected wages are positively associated with reservation wages. In addition, incorporating wage expectations into the econometric framework was found to influence the magnitude of the key elasticities: namely the elasticity of unemployment duration with respect to the reservation wage and the elasticity of the reservation wage with respect to unemployment duration.

Suggested Citation

  • Sarah Brown & Karl Taylor, "undated". "Reservation Wages, Expected wages and the duration of Unemployment: evidence from British Panel data," Working Papers 2009001, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2009001
    as

    Download full text from publisher

    File URL: http://www.shef.ac.uk/content/1/c6/09/26/55/SEERP2009001.pdf
    File Function: First version, 2009
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mark Stater & Jeffrey B Wenger, 2017. "The Immediate Hardship of Unemployment: Evidence from the US Unemployment Insurance System," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(1), pages 17-36, January.
    2. Paweł Strzelecki & Joanna Tyrowicz, 2015. "Inferring the Adequacy of Wage Expectations Among the Non-Working," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 6, pages 51-69.
    3. repec:wrk:warwec:991 is not listed on IDEAS
    4. Cecilia Garavito Masalías, 2010. "Vulnerabilidad en el empleo, género y etnicidad en el Perú," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 33(66), pages 89-127.
    5. Gutknecht, Daniel, "undated". "Do Reservation Wages Decline Monotonically? A Novel Statistical Test," Economic Research Papers 270635, University of Warwick - Department of Economics.
    6. Akiko Maruyama, 2018. "One-sided learning about one fs own type in a two-sided search model: The case of n types of agents," GRIPS Discussion Papers 18-15, National Graduate Institute for Policy Studies.
    7. Akiko Maruyama, 2016. "One-sided learning about one's own type in a two-sided search model," GRIPS Discussion Papers 15-26, National Graduate Institute for Policy Studies.
    8. Daniel Gutknecht, 2013. "Testing for Monotonicity under Endogeneity An Application to the Reservation Wage Function," Economics Series Working Papers 673, University of Oxford, Department of Economics.
    9. Akiko Maruyama, 2013. "Learning about one's own type: a search model with two-sided uncertainty," GRIPS Discussion Papers 12-24, National Graduate Institute for Policy Studies.

    More about this item

    Keywords

    ;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:shf:wpaper:2009001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mike Crabtree The email address of this maintainer does not seem to be valid anymore. Please ask Mike Crabtree to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/desheuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.