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

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  • Pedro Portugal
  • John T. Addison

Abstract

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.

Suggested Citation

  • Pedro Portugal & John T. Addison, 2008. "Do Reservation Wages Really Decline? Some International Evidence on the Determinants of Reservation Wages," Working Papers w200802, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w200802
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    References listed on IDEAS

    as
    1. John T. Addison & Mário 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, January.
    2. Dale T. Mortensen, 1977. "Unemployment Insurance and Job Search Decisions," ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
    3. Devine, Theresa J. & Kiefer, Nicolas M., 1991. "Empirical Labor Economics: The Search Approach," OUP Catalogue, Oxford University Press, number 9780195059366.
    4. Bloemen, Hans G & Stancanelli, Elena G F, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 400-439, April.
    5. repec:hal:spmain:info:hdl:2441/9704 is not listed on IDEAS
    6. Mr. Eswar S Prasad, 2003. "What Determines the Reservation Wages of Unemployed Workers? New Evidence From German Micro Data," IMF Working Papers 2003/004, International Monetary Fund.
    7. repec:hal:wpspec:info:hdl:2441/9704 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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