Individual Wealth, Reservation Wages, and Transitions into Employment

Bloemen, H.; Stancanelli, Elena

doi:10.1086/319566

“…First, the literature on job offer acceptance is often based on the concept of a reservation wage, which permits empirical predictions concerning the duration of unemployment in relation to the number of available jobs and their wage level. These proposed relationships have been tested and confirmed extensively on an empirical level (Addison et al 2010;Bloemen and Stancanelli 2001; for an overview, see LudwigMayerhofer 2008a: 218 et seq.). One drawback of this approach has been that the separation of supply-and demandside factors was barely feasible or only possible indirectly 4 For monetary job characteristics, a similar argument could be made.…”

Section: Literature Reviewmentioning

confidence: 81%

Unemployment and willingness to accept job offers: results of a factorial survey experiment

Abraham

¹

,

Auspurg

²

,

Bähr

³

et al. 2013

J Labour Market Res

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Abstract Matching individuals to jobs is a fundamental problem in any labour market. This paper focuses on job characteristics, such as wages, job quality, and distance from the current place of residence, and the impact of these characteristics on the willingness of employed and unemployed individuals to accept new job offers. Using an experimental factorial survey module (FSM) implemented in the fifth wave of a large population survey (Panel Study Labour Market and Social Security), the willingness of employed and unemployed labour market participants to accept new job offers was compared while considering job characteristics like gain of income or commuting distance. In this study, unemployed and employed individuals received the same set of hypothetical job offers. Consistent with theoretical arguments, the about 20,000 evaluations provided by about 4,000 respondents showed that unemployed participants generally exhibit a greater willingness to accept new job offers than employed ones. Moreover, unemployed individuals were likely to make more concessions than employed individuals with respect to job quality, such as accepting fixed-term job offers. Interestingly, little evidence for different decisionmaking or weightings of mobility costs was found, which enables us to conclude that interregional unemployment disparities can scarcely be explained by unemployed individuals lacking the willingness to work or relocate. Terms of use: Documents in

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“…They calculate hourly reservation wages using wage information from the Longitudinal Retirement History Survey (LRHS). Bloemen and Stancanelli (2001) reservation wages that are constant over the duration of nonemployment. Information concerning reservation wages is not always included for every country and every year.…”

Section: Previous Empirical Findingsmentioning

confidence: 99%

Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective

Humpert

¹

,

Pfeifer

²

2012

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Abstract This paper takes a labor supply perspective (neoclassical labor supply, job search) to explain the lower employment rates of older workers and women. The basic rationale is that workers choose non-employment if their reservation wages are larger than the offered wages. Whereas the latter depend on workers' productivity and firms' decisions, reservation wages are largely determined by workers' endowments and preferences for leisure. To shed some empirical light on this issue, we use German survey data to analyze age and gender differences in reservation and entry wages, preferred and actual working hours, and satisfaction with leisure and work. Terms of use: Documents in Eine Erklärung alters-und geschlechtsspezifischer

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“…For example, a recent study by Bloemen and Stancanelli (2001) uses self-reported reservation wages for unemployed workers in the Dutch socio-economic panel from 1987 to 1990. They report in their Table 4 that a 1000 Florin increase in unemployment income raises the reservation wage of household heads by 4.4 percent and of spouses by 9.0 percent, although the latter figure is not statistically different from zero.…”

Section: Measurementmentioning

confidence: 99%

“…This is not necessarily equal to the average value ofw n b among unemployed workers, the quantity that Feldstein and Poterba (1984) and Bloemen and Stancanelli (2001) measure using self-reported reservation wages.…”

Section: Worker Heterogeneitymentioning

confidence: 99%

On the Optimal Timing of Benefits with Heterogeneous Workers and Human Capital Depreciation

Shimer¹,

Werning²

2006

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This paper studies the optimal timing of unemployment insurance subsidies in a McCall search model. Risk-averse workers sequentially sample random job opportunities. Our model distinguishes unemployment subsidies from consumption during unemployment by allowing workers to save and borrow freely. When the insurance agency faces a group of homogeneous workers solving stationary search problems, the optimal subsidies are independent of unemployment duration. In contrast, when workers are heterogeneous or when human capital depreciates during the spell, the optimal subsidy is no longer constant. We explore the main determinants of the shape of the optimal subsidy schedule, isolating forces for subsidies to optimally rise or fall with duration.

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Individual Wealth, Reservation Wages, and Transitions into Employment

Cited by 99 publications

References 17 publications

Unemployment and willingness to accept job offers: results of a factorial survey experiment

Unemployment and willingness to accept job offers: results of a factorial survey experiment

Explaining Age and Gender Differences in Employment Rates: A Labor Supply Side Perspective

On the Optimal Timing of Benefits with Heterogeneous Workers and Human Capital Depreciation

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