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Reservation wage levels in UK and German financial services sectors

Author

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  • Duncan Watson
  • Robert Webb

Abstract

Although expenditure on wages represents a major element of costs in financial services firms, there is a dearth of studies analysing wage levels in the sector. This paper examines reservation wage levels in the sector by utilising maximum likelihood selection and stochastic frontier methodologies in two leading European economies: UK and Germany. Our results show that wage achievement is higher in the UK than Germany. At first glance, this seems counter-intuitive, given that actual wage costs and the overall cost--income ratio is higher in Germany than the UK.

Suggested Citation

  • Duncan Watson & Robert Webb, 2008. "Reservation wage levels in UK and German financial services sectors," The Service Industries Journal, Taylor & Francis Journals, vol. 28(8), pages 1167-1182, October.
    • Handle: RePEc:taf:servic:v:28:y:2008:i:8:p:1167-1182
    DOI: 10.1080/02642060802187959
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    References listed on IDEAS

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    1. Ms. Agnes A Belaisch & Mr. Joaquim Vieira Ferreira Levy & Ms. Laura E. Kodres & Mr. Angel J. Ubide, 2001. "Euro-Area Banking At the Crossroads," IMF Working Papers 2001/028, International Monetary Fund.
    2. Koetter, Michael & Nestmann, Thorsten & Stolz, Stéphanie & Wedow, Michael, 2004. "Structures and Trends in German Banking," Kiel Working Papers 1225, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. Leppin Julian S., 2014. "The Estimation of Reservation Wages: A Simulation-Based Comparison," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(5), pages 603-634, October.
    2. Luz A. Florez & Ligia Alba Melo-Becerra & Carlos Esteban Posada, 2021. "Estimating the reservation wage across city groups in Colombia: A stochastic frontier approach," Borradores de Economia 1163, Banco de la Republica de Colombia.
    3. Haonan Zhang & Hu Zhao & Saisai Meng & Yanghua Zhang, 2022. "Research on the Jobs-Housing Balance of Residents in Peri-Urbanization Areas in China: A Case Study of Zoucheng County," Sustainability, MDPI, vol. 14(13), pages 1-24, June.

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